China.Hawaii Chamber of Commerce ®
Hong Kong.Hawaii Chamber of Commerce ®
Asia Pacific California Chamber of Commerce ®

"Hawaii-China Guan Xi, We Get Things Done" - Trade Advocacy Organization

      061101-donald tsang.jpg (11044 bytes)   


 USA Small Business Administration (SBA) Selected Johnson Choi/HKCHcc 2008 United States National Champion

Click on the Logo to Join HKCHcc on   and follow us on 


Chinese business etiquette


Biz: China Hong Kong Hawaii SF

Seminar Material

What people said about us 

China Earthquake Relief

Tax & Government

Hawaii Voter Registration


Hawaii's China Connection

Doing Business in Hong Kong & China

Share Hong Kong, China & Hawaii Biz*            

View HKCHcc and Hawaii Chinese Organizations Listing & Event Calendar
In Depth Look of Hong Kong - Past, Current & Future
In Depth Look of China - Past, Current & Future
To succeed in business in Hawaii, you must understand the islands
How to Do Business with China, through Hong Kong & Setting up Business in China?
Hawaii Failed Business Image and Continue Missed Opportunities

Skype - FREE Voice Over IP  View Hawaii's China Connection Video Trailer

Hong Kong, China & Hawaii News Archive for Year 2002  Archive Jan 1, 2003.........:>
January - April 2003  May - July  2003  Aug - Sept 2003  Oct - Dec  2003 January - Mar 2004  April - June 2004  July - Sept 2004
Oct - Dec 2004 Jan - Feb 2005  Mar - Apr 2005  May - Jun 2005 July - Aug 2005 Sept - Oct 2005 Nov - Dec 2005 Jan - Feb 2006 
Mar - Apr 2006 May - Jun 2006 Jul - Aug 2006 Sept - Oct 2006 Nov - Dec 2007 Jan - Feb 2007 Mar - Apr 2007 May 2007 June 2007
July 2007 Aug 2007 Sept 2007 Oct 2007 Nov 2007 Dec 2007 Jan 2008 Feb 2008 Mar 2008 May 2008 June 2008 July 2008
Beijing Olympics Aug 2008 Sept 2008 Oct 2008 Nov 2008 Dec 2008 Jan 2009 Feb 2009 Mar 2009 Apr 2009 May 2009 June 2009
July 2009 Aug 2009 Sept 2009 Oct 2009 Nov 2009 Dec 2009 Jan 2010 Feb 2010 Mar 2010 Apr 2010 May 2010 June 2010 Jul 2010
Aug 2010 Sept 2010 Nov 2010 Dec 2010 Jan 2011 Feb 2011 Mar 2011 Apr 2011 May 2011 June 2011 Jul 2011 Aug 2011 Sept 2012
Oct 2011 Nov 2011 Dec 2011 Jan 2012
China Projects Bidding Information - update daily    Scholarship & Grants  News Archives in PDF Format 

Do you know our dues paying members attend events sponsored by our collaboration partners worldwide at their membership rates - go to our event page to find out more! After attended a China/Hong Kong Business/Trade Seminar in Hawaii...still unsure what to do next, contact us, our Officers, Directors and Founding Members are actively engaged in China/Hong Kong/Asia trade - we can help!

Are you ready to export your product or service? You will find out in 3 minutes with resources to help you - enter to give it a try

(approximate $ exchange rates: US$1 = HK$7.8, US$1 = RMB$6.8)

China President Hu Jintao USA State Visit January 19 - 21 2011

Wine-Biz - Hong Kong Brand Hong Kong Video

Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)

About APEC APEC 2011 November 2011 Honolulu Hawaii USA Inside APEC  

AmCham Shanghai latest Viewpoint - US Export Competitiveness in China - 2010 Washington DC Door Knock 

成功之道 武进制造 Wujin - Changzhou - Jiangsu Province - China 

 HK$6,000 will be given to each holder of a valid Hong Kong Permanent Identity Card 

Happy Chinese New Year - Year of the Dragon - January 23 2012

Honolulu Chinatown - Year of the Dragon 2012 Lion Dance with Firework

President Obama's Lunar New Year Message - Year of the Dragon

Under the Hawaii State Law "Asian Lunar New Year Commemoration Week" The one week period following the day of the Chinese New Year shall be known and designated as the "Asian Lunar New Year Week of Commemoration in Hawaii". This week is not and shall not be construed as a state holiday. [L 2007, c 48, §2] click for more details

Share on Facebook

Hong Kong*:  Feb 1 2012 Share

Business on a handshake fits Ferragamo just fine - Italian luxury giant's old-fashioned way of operating won't change despite cost pressures to shift factories to China. Italian luxury fashion house Ferragamo has done business the old-fashioned way for decades with the factories that make its goods - "a firm handshake and a look in the eye". And this very Italian way of doing business will continue even amid technological change and cost pressures, according to company chairman Ferruccio Ferragamo, who visited Hong Kong late last year. With some blaming expensive production costs for Italy's economic troubles, the pressure for the country's highly regarded manufacturers to outsource to cheaper countries such as China is enormous. But Ferragamo, chairman of Florence-based Salvatore Ferragamo Italia, a luxury goods company founded by his father, Salvatore Ferragamo in 1928, is standing firm. "Because we are 100 per cent made in Italy the market is worried about the high costs and all that," Ferragamo said, noting that his competitors had relocated part of their production outside Italy, either officially or unofficially. "But we have a very flexible structure that means we can compete very well. We have many factories that produce exclusively for Ferragamo. The agreement is a handshake, a look at them in the eyes, but no contract." Such an arrangement, he argued, was time-tested and a win-win formula because Ferragamo could walk out when the factories failed to perform, and the factories did not have to worry about losing contracts to others because the partnership would continue indefinitely. One factory has worked for Ferragamo for 58 straight years. In addition, when the market fluctuated, quantities could be varied more flexibly in the absence of a contract, Ferragamo said, which helped both factories and the company. "Their problem is our problem because they are our factories," he said. "If their mentality is very good and they are very much committed to us, we respect that and we try to improve them. "We try to make them evolve. We are not looking to move production outside Italy where it might be a lot cheaper because they belong to a family." Ferragamo is not blind to the problems of his country: the government was too slow and not practical enough, and the business community faced high costs and little flexibility. He also said finance had increasingly become an issue for many companies because bankers were very strict about making loans to avoid risks. In the manufacturing sector, liquidity has become difficult because not many firms paid on time. More Italian businesses might have moved to Asia to control output costs and raise funds through a stock market listing, Ferragamo said. China, meanwhile, has expressed increasing interest in acquiring Italian brands and industrial know-how since the unfolding of the euro-zone debt crisis. In January, machinery maker Shandong Heavy Industry Group-Weichai Group of Jinan reached a deal with the debtors of Italian luxury yacht group Ferretti to acquire 75 per cent of its share at €374 million (HK$4.1 million), more than half of which would finance debt. Small and medium enterprises are also seeking deals in Italy. Sitoy, a Hong Kong-listed luxury leather goods manufacturer for Prada and Coach, acquired Italian brand Tuscany in February last year. It said the economic conditions opened more potential acquisition targets in Italy. Ferragamo said his company's listing on the Milan stock exchange last year was more for management reasons - the family has 25 grandchildren of the founder competing for three places in the firm. Ferragamo's shares have advanced 30 per cent since it went public in Milan in June. The stock closed at €12.53 on Friday. Ferragamo said it chose not to list in Hong Kong even though mainland China remained an important market for the brand. It planned to enter as many as eight new mainland cities over the next three to five years. "We are 100 per cent made in Italy. It will be funny not to have the listing certificate in Milan but somewhere else," he said. "If I could go back I would have done exactly the same thing."

Private jet operators are warning that Hong Kong will lose out to Shenzhen if it ignores the acute shortage of aircraft parking space at Chek Lap Kok. The number of business jets registered in the city has surged to 50 from two since 1998 when the airport's Business Aviation Centre (BAC), catering to mainland firms and wealthy clients, opened. But the BAC has not expanded as rapidly, forcing customers to park their planes at a remote area. "Sometimes we have to park our clients' jets on the tarmac between the two runways at the far end of the airport island," said Wyn Li, director of marketing and client relations for Metrojet, one of Asia's largest private jet operators. It takes several hours to tow aircraft back to BAC for take-off, according to Li. Business Aviation Asia (BAA), a Shenzhen-based business jet operator, recently struggled to find a bay at the city's airport to change an aircraft engine's waste oil. The overhaul, which usually takes eight hours, took three days to complete and made the owner very frustrated, said Jeffrey Lowe, a former director of sales and marketing at BAA. "If Hong Kong continues not to address the [lack of] space issue, it is quite logical for the owners to look for alternative airports in the Pearl River Delta," Lowe said. Metrojet is seeking to persuade its clients to park their jets at Clark International Airport in the Philippines, where it has invested in a maintenance facility. The additional costs arising from parking overseas could easily be offset by the lower labour costs, parking fees and jet fuel prices at Clark, Li said. Private jet operators want the Airport Authority to consider their needs and incorporate the development of business aviation into their expansion plans. The authority recently completed its public consultation on the development of a third runway, which included plans for a new business jet facility. "Airport planning is a constraint to business aviation in Hong Kong, said Chris Buchholz, chief executive of newly formed Hong Kong Jet, a unit of HNA Group. "I think common sense will prevail and we will have a second FBO [fixed-base operator] in Chek Lap Kok," Buchhloz said. Hong Kong Jet is among the interested participants in the upcoming bidding to be the second fixed-base operator - like BAC for business aviation. In theory, the existing two hangars and apron area at BAC can accommodate up to 40 private jets. But private jets will occasionally be instructed to park at a remote area when the number exceeds 30, according to Ng Chi-kee, BAC's deputy director of airport operations. "Parking a private jet, which will not be in use for a few days, at the remote parking base could enhance the efficiency and movement of aircraft in the ramp area," Ng said. Unlike commercial jets, which have a tight turnaround time, business jet operators usually have lead time of several days. Ng said BAC was unaware of private jet operators' complaints, but they had been in constant contact with BAC to enhance their operation. Private jet operators say that a second fixed-based operator would ease the lack of parking space at the current facility. About two-thirds of the 50 private jets in Hong Kong have to park outside of the two hangars. BAC's third hangar is due to open in the first quarter of next year, but it can only provide limited relief from the overcrowding. A new operator for a business jet facility could bring about competition that could lower the handling fee that BAC, which has a market monopoly, levies. BAC charges hangar rates of HK$100,000 to HK$1 million a month, depending on the size of the aircraft.

The city’s cold snap discouraged many mainlanders from visiting Hong Kong over the Lunar New Year holidays, the Tourism Board chief said on Monday morning. James Tien Pei-chun said the total of 700,000 mainland visitors to the city was well below expectations – it was only a 6 per cent increase from last year, while a 10 per cent rise – over 1.1 million visitors – had been expected. “Preliminary analysis shows that it was due to the weather. The second to the fourth day of the Lunar New Year was especially cold,” Tien said during a radio interview on Monday morning. The number of visitors arriving as individuals increased 4.7 per cent while those travelling with tours grew by 17 per cent, he said. Another reason for the shortfall is an increase in the price of hotel rooms, he said. That rise was caused by a shortage of rooms, he said, disagreeing with recent remarks by a spokesman for the hotel industry. Michael Li Hon-sing, executive director of the Federation of Hong Kong Hotel Owners, said recently that hotel room occupancy was not at saturation level. Tien said Li’s figures were wrong, and that hotel room occupancy during this year’s Lunar New Year was over 90 per cent. Hong Kong currently has about 62,000 hotel rooms, and in a year’s time there will be an estimated 10,000 more, Tien said. But that will still leave a shortage, since the number of visitors next year is expected to grow by 2 million, he said. Most visitors during Lunar New Year are from the mainland.

The financial secretary yesterday pledged to expand spending on education, welfare and health care and hinted at more tax breaks and concessions ahead of his last budget speech on Wednesday. John Tsang Chun-wah wrote in his official blog that a host of policies were needed to boost the financial well-being of Hong Kong people before an impending economic storm caused by the European debt crisis. "I would ... adopt a series of measures to stabilise the economy and strengthen businesses' ability to resist adversities," Tsang wrote. His comments came as Chief Executive Donald Tsang Yam-kuen yesterday repeated his warning of the severity of the European economic crisis at the World Economic Forum being held in Davos, Switzerland. "Now, what is happening in Europe is not only the lack of discipline of the market ... [it has been] expanding too quickly," he said in a TVB (SEHK: 0511) interview from Davos. "What is more, there are also problems in monetary management [and] problems with the fiscal systems, fiscal management in [the European countries]." The situation today was more worrying than that during the Asian financial crisis in 1998, as "it's rare to see all these three problems emerge at the same time", Donald Tsang said. The chief executive earlier told an audience in Davos that he had "never been as scared as now" about the gravity of the crisis. Echoing those remarks, the finance chief said the government would be "preventive" in its approach and "ready" for the economic crisis, and would implement measures "as soon as possible" to minimise its impact on the city. John Tsang also said this year's budget would refer to the policies he introduced in 2009, including specific measures to help the middle class and the underprivileged. He wrote that there would be more investment in areas including education, health care and social welfare, in order to "relieve the burden on the next administration". He would also "increase pragmatically all expenses related to livelihoods" by implementing one-off relief measures included in Donald Tsang's policy address in October. Donald Tsang said he would rather the economic meltdown plagued the city sooner rather than later. "If it really bursts, I would like to see it take place during my term so that I have the chance to deal with it," he said. "If it takes place during the government transition, it could be more troublesome to us." He quickly added: "I didn't mean that I want it to burst ... But we have to be prepared [for the worst]." The budget is likely to include measures such as waiving property rates, lifting the ceiling for mortgage relief, and extending the entitlement period for tax deduction from 10 to 15 years, the Post has learned. But cash handouts would not be given to adult permanent residents as they were last year, a government source said.

After what felt like an endless holiday season, the initial-public-offerings market in Hong Kong is finally stirring to life once again. But companies had better act before it cruelly shuts again. Hong Kong shares have been on a tear in 2012, ratcheting up 11% of gains, with one of last year’s big losers, Li & Fung, up 24%. The Hang Seng Index is taking a slight breather on Monday, the eighth day of the Lunar New Year, as investors take profits after six consecutive sessions of gains. For now, the horror of 2011 seems to have been forgotten. “If I could annualize the [year-to-date] return I’d lock up shop now!” writes Citigroup Asia Pacific strategist Markus Rosgen, quoting an investor. Call it the effect of the dragon if you will, but as Citi notes, markets in Hong Kong and Taiwan have tended to move higher after the Lunar New Year holiday. The gains are being magnified this time as Hong Kong stocks claw their way back up from very cheap levels, with the prospect of a prolonged low-rate environment giving them a shot in the arm. Plus, there is just a lot of cash to be put to work. Trading volumes in 2011 were depressed, flirting with 2009 lows, according to Citi, while bank deposits piled up. In Hong Kong, bank deposits at the end of November were up 10% from a year earlier; for Asia excluding Japan, they were up 14%. That Asian total is the equivalent of $2.2 trillion, no chump change. Bankers last year said their pipelines were just bursting with stalled equity, debt and M&A deals, with 146 IPOs worth $25.4 billion postponed in Asia in 2011, according to Dealogic. Some of the more eagerly anticipated IPOs include offerings by China Everbright Bank Co., Manchester United Ltd. and Mongolia’s Erdenes-Tavan Tolgoi Co. One of the first major IPOs could be that of Canada’s Sunshine Oilsands Ltd., which Dow Jones Newswires reports is kicking off its pre-IPO marketing this week as it seeks to raise up to $700 million. There are just some slight obstacles ahead that could derail things again—like, Greece’s defaulting on its debt payments in March.

Hong Kong's gross domestic product likely grew 5% in 2011, in line with government forecasts, a person familiar with the situation said Monday. Financial Secretary John Tsang is due to report the GDP data and forecast economic growth for this year on Wednesday, when he presents the government's budget for the fiscal year starting April 1. The person familiar with the situation said the growth forecast for 2012 is likely to be below 3%, given the weakening global economy. Economists say the global slowdown will be more visible during the first half of 2012, dragging on the city's economy—though strong domestic consumption and tourism spending could lessen the effect. The Hong Kong government will likely report a budget surplus of around 65 billion Hong Kong dollars (US$8.38 billion) for the current financial year ending March 31, due to surprisingly strong land sales and stamp-duty receipts, the person said. That compares with a surplus of HK$75.1 billion in the previous fiscal year. The city's economy expanded 7.5% in 2010, after contracting 3.3% in 2009.

 China*:  Feb 1 2012 Share

Beijing has moved to outlaw foreign investment in the construction and management of villas on the mainland - though the definition of a villa remains to be clarified. In an amendment to foreign investment rules just published by the National Development and Reform Commission (NDRC) and the Ministry of Commerce, villa construction and management was re-categorised from "restricted" to "prohibited". The change, contained in the revised Catalogue of Industries for Guiding Foreign Investment (2011 Amendments), means that foreign investment in this type of real estate business is banned in the future. The amended catalogue will become effective today. The new catalogue lists industries in which foreign investment is either "encouraged", "restricted", or "prohibited". It replaces the catalogue that took effect in December 2007. But in the absence of a clear definition, there is no certainty in the property industry about what qualifies as a villa. In the past, the central government appeared to have accepted the concept that a villa meant a single detached court villa, global law firm Mayer Brown noted in a commentary on the revised catalogue. This indicated that any semi-detached villa, townhouse, overlapped villa or penthouse might not be categorised as a villa real estate project. However, there is now talk in the market of the likelihood that the Ministry of Land and Resources is considering an official definition of the term "villa" that might embrace semi-detached villas or townhouses, thus banning foreign investment in such "quasi-villa" projects. "It is yet to be seen how and when such a legal definition would be formulated and officially released," Mayer Brown said. Against the background of uncertainty, analysts said the amended catalogue could have a negative effect on new foreign investments in the real estate sector over the next few years, although they believed the impact would not be severe. "Since the prohibition of any land supply for villas has been provided for in various rules since 2003, the impact of the [revised] Catalogue on the real estate industry may not be huge in this regard," Mayer Brown said. The prohibition of land supply for villa projects was issued in February 2003 by the Ministry of Land and Resources. Later, in December 2006, the ministry and the NDRC issued the catalogue on prohibited land use projects, which categorised a "villa real estate project" as a "prohibited land use project". Amendments to the foreign investment rules contained in the revised catalogue affect a number of industries including mines, food processing, and textile manufacturing. Law firm Morgan Lewis said the revisions showed the central government's increasing desire to encourage foreign investment in high technology, high-end manufacturing, clean energy, energy saving, environmental protection and modern services.

Kate Moss modelling for Mango, which is moving into China. With an eye on the rising spending power of China's middle class, international fast-fashion retailers are rushing to open stores there, particularly in second-tier cities. Among the latest to declare their expansion plans is Spanish clothing retailer Mango, which plans to open a further 800 stores in China as part of a global expansion programme, according to media reports. The fashion label already has 200 stores in China and is reported to be targeting a 10 per cent contribution to its total global revenue from China by next year. European fashion company C&A is also expanding aggressively in China. It has already opened 11 stores there and plans to have 150 stores distributed all over the country by 2015. US-based fashion retailer the Gap has expanded to Tianjin after opening in Beijing, Shanghai, and Hangzhou; while another fashion retailer, Forever 21, has also leased a 2,500 square metre store in Sun Hung Kai Properties (SEHK: 0016)' Beijing apm shopping mall. The lure of strong and growing retail sales in the country is proving irresistible to international retailers, and the latest sales data released by the Ministry of Commerce showed that sales at China's main retailers and restaurants during the week-long Lunar New Year holiday rose 16.2 per cent from a year earlier to 470 billion yuan (HK$576 billion). The data showed that sales of clothes, jewellery and food by value jumped 18.7 per cent, 16.4 per cent and 16.2 per cent on year, respectively. Ada Nip, head of retail at property consultancy DTZ's North China division, said fast-fashion retailers were expanding the most aggressively, targeting such second-tier cites as Qingdao. "The retail markets of the second-tier cities are becoming mature and the spending power of shoppers is rising. Also, more new shopping malls have been completed." Though rents were similar to those charged in first-tier cities, operating costs were lower, as was competition, Nip said. Simon Lam, executive director of retail services for the mainland at consultancy Colliers International, said more new retailers from Europe and Russia had begun to study the development potential of China's retail market since the European debt crisis. "Most are fashion retailers. But it will take at least one or two years to finalise their expansion plans." Tom Gaffney, national director and head of the retail department at Jones Lang LaSalle, said many international brands had by now established or identified target locations in first-tier cities and were looking at prime locations in second- and even third-tier cities. "Working with numerous luxury groups they are also looking for the same opportunities. These cities provide the next wave of opportunities and growth for these retailers." Gaffney said that given relatively depressed markets in Europe and in the USA, many international retailers and luxury brands were allocating large amounts of capital and budgets to Hong Kong and the mainland. Lam said the development of a high-speed rail network had also encouraged international brands to expand into second-tier cites. So far, however, the expansion had not driven retail rents in second-tier cities higher, according to Nip. "The malls are newly-developed. And asking rents will be low if they all launch at the same time. I do not think we will see significant growth in rents until leases come up for renewal in two or three years' time."

European Union Trade Commissioner Karel De Gucht addressing trade talks at the EU-Belgium pavilion in Shanghai in July 2010. The EU is drafting a law in response to protectionism in China's public markets, De Gucht told the German magazine in an interview published on Monday. The European Union is drafting a law in response to Chinese protectionism in public markets, EU trade commissioner Karel De Gucht told the German Focus magazine in an interview published on Monday. “My colleague, internal market commissioner Michel Barnier, and I are preparing a draft law on public markets so that we can respond if the Chinese continue to deny European companies access to certain segments of the market,” he said. The law would also make it possible for the European Commission to close access to public markets to Chinese companies in return. The draft should be ready by March, the magazine said. De Gucht criticised China for what he called “nationalist commercial practices”, “massive subsidies” and “monopolistic access to raw materials”. “All of this makes it very difficult to do business there,” the commissioner said. Negotiations for China’s adhesion to a World Trade Organisation government procurement agreement have stalled on Beijing’s refusal to allow EU firms the same access to public markets as that enjoyed by Chinese companies in Europe. The WTO’s appeal organ is due to make a ruling later on Monday on a challenge by China, which was found guilty by the body last year for restricting exports of raw materials crucial for European industry.

China's Yu Jing (centre) broke the women's 500m speed skating world record in Calgary on Sunday, becoming the first woman to break the 37-second barrier. China's Yu Jing broke the 500 metre world record at the World Sprint Speed Skating Championships on Sunday. The 26-year-old, who competed for China at the 2010 Vancouver Olympics, clocked 36.94 seconds at the Olympic Oval facility to become the first woman to break the 37-second barrier. The previous world recod of 37.0sec was set in December of 2009 at Salt Lake City by Germany’s Jenny Wolf. It was the second world record in as many days here, after Canadian Christine Nesbitt broke the 1,000m world record on Saturday. Yu earned the sprint world title at the end of the weekend’s four races with a total of 148.610 points, just edging defending champion Nesbitt who finished with 148.630 points. China’s Zhang Hong was third with 149.700 points. On the men’s side, South Korea’s two-time sprint world champion Lee Kyou-hyuk was dethroned by Stefan Groothuis of the Netherlands. The Dutch skater emerged from the four races with a total of 136.820 points with Lee second on 137.000. South Korea’s Mo Tae-bum was third. Two other speed skating world championships are on the slate for this year – the all-around worlds at Moscow February 18-19 and the distance worlds at Heerenveen in the Netherlands March 22-25.

For generations, Chinese men looking for a dose of vigor have sworn by a traditional remedy: fungus harvested from dead caterpillars, known in some quarters these days as Himalayan Viagra. Now Chinese investors are using the rare fungus to try to boost something else—their investment returns. The fungus has doubled in price over the past two years and the top grade now fetches more than $11,500 a pound, according to Fuzhou-based brokerage firm Industrial Securities. With Chinese stocks falling, real-estate markets flat and bank deposits offering measly returns, Chinese investors have been looking for help in strange places. Besides traditional medicinal products, they are plowing money into art-based stock markets, homegrown liquors, mahogany furniture and jade, among other decidedly non-Western asset classes. "On a micro level, speculation has appeared," says Long Xingchao, president of the information center of the China Association of Traditional Chinese Medicine. The association says prices of traditional medicines, including red ginseng and false starwort, have surged since 2010, partly because of speculators. Mr. Long insists, however, that a price bubble isn't forming. "There's nothing to pop," he says. Newfangled exchanges are sprouting across China to take advantage of the excitement. Nanjing Pharmaceutical Co. set up an exchange last year for trading traditional medicines such as deer antler. In November it extended hours so investors could trade when they get home from work. "Expanding the hours gives investors more time to make a profit," the exchange said on its website. Exchanges have popped up that allow investors to buy and sell shares of individual works of art. In the city of Tianjin last summer, an unnamed seller floated about 30 million shares of a painting called "Eternal Lotus Wind," at an initial price of 1.61 yuan apiece—about 25 cents. Within two days, investors had bid the shares up 52%, valuing the painting at about $11.5 million. Then the shares began sliding; they now trade at 36% below the initial offering price. Cui Ruzhuo, who painted "Eternal Lotus Wind" but didn't profit from the offering, says the art market still has legs. "We still haven't arrived at the high point," he says. Investors are taking to drink, as well. Maotai—the most popular variant of a homegrown liquor called baijiu, and once a favorite of Chairman Mao—now sells for more than $300 a bottle, double the price a year ago. "In the past, baijiu was only for consumption," says Liu Xiaowei, chairman of auction house Beijing Googut Auction Co., which held a baijiu action last month. "But now it's also a collectors' item and for investment." At the December auction, a businessman from Jiangsu province dropped $8,300 on two dozen bottles of liquor of uncertain vintage—their water-stained cardboard packaging suggested they were old—almost four times the starting price on the auction docket. "If I held these for a while, I could definitely make some money," said the buyer, who didn't provide his full name. China's banks are getting in on the action. Industrial & Commercial Bank of China Ltd., China's biggest state-owned lender by assets, set up a fund for customers to invest in high-end pu'er tea, marketing it as a low-risk investment. China Merchants Bank Co. is planning to allow some customers to trade diamonds through its website. Auction house Googut helped three banks set up bank-run investment funds for customers to invest in baijiu and other liquors. Mr. Liu, Googut's chairman, said the funds are eyeing an annual return of about 20%. The problem for Chinese investors is that returns have evaporated from more traditional markets. Real estate was once China's favorite investment, but government efforts to contain price increases and keep housing affordable have led to price stagnation and even declines in some cities. China's major stock exchange in Shanghai is down almost 20% since the beginning of 2011. Bank deposit rates are lower than the pace of inflation, meaning savers effectively pay banks for the privilege of handling their money. "There really are very few investment channels," says Ren Jun, a 30-year-old media entrepreneur with investments in contemporary art, antiques, gold and silver. "That's why I'm kind of forcing myself to be brave in trying new options." China's central government is less than intoxicated by the investment party. It said in November it would tighten oversight of Chinese asset exchanges, warning of "serious speculation and price manipulation" among some and adding that some "managers have run off with clients' funds." Some of the biggest boom-and-busts have taken place at art exchanges. "Roaring Yellow River," a traditional landscape painting by the late artist Bai Gengyan, was the first work listed last year by the Tianjin Cultural Artwork Exchange. Within two months of the offering, shares were trading at nearly $3 each, up from about 15 cents, valuing the painting at about $18 million. The previous auction high for the artist's work was a bit more than $600,000. About two months after the offering, the Tianjin city government suspended trading in "Roaring Yellow River" and another painting, and the exchange imposed limits on daily and monthly price changes. Shares of "Roaring Yellow River" now trade at about 20 cents, down more than 90% from their peak. Shanghai financial-software designer Jimmy Wang sunk about $790,000 into shares of a pink diamond and a jade pendant traded on the same exchange, putting up his house as collateral to finance the investment. He says he has lost as much as 2.7 million yuan. "So basically I've lost my house to the bank and I am struggling to pay the interest," he says. Such hard-luck stories haven't slowed the hunt for the next great investment. Wang Jingbo, chief executive of wealth-management company Noah Holdings Ltd. in Shanghai, said late last year she was considering recommending to clients a fund that invests in high-end watches. Googut's Mr. Liu believes the next market to watch is white jade. Mr. Ren, the media entrepreneur, says he is looking at diamonds. "While silver and gold may see fluctuations depending on international markets," he contends, "the price of diamonds never drops."

A record number of tourists swarmed into the city of Yichang, home of the Three Gorges Dam in central China's Hubei province, during the seven-day Spring Festival holiday. From January 22 to 28, over 565,000 tourists visited the city, bringing in 192 million yuan ($30.45 million) in tourism-related revenues, according to statistics frmo the city's tourism bureau. The city touts the scenic Three Gorges Dam, as well as the Gezhouba Dam and Xiling Gorge, as major tourist attractions. The Three Gorges Dam is a multi-functional water control system, consisting of a 2,309-meter-long, 185-meter-high dam, a five-tier ship lock and 26 hydropower generators. The construction of the $22.5-billion Three Gorges project began in 1993 and was finished in 2009. It started generating electricity in 2003.

Fishermen, scientists and green campaigners have joined forces to prevent the rare Yangtze finless porpoise from disappearing from Dongting Lake in Central China - YUEYANG, Hunan - He Daming may only have received eight months of education as a child, but he is smart enough to realize that the fate of the fishermen in his village is closely tied to that of the rare finless porpoise. The 43-year-old, who has been fishing Dongting Lake in Hunan province since he was 11, recently handed out 2,000 copies of a letter he wrote urging fellow villagers to protect the endangered mammals. Researchers from the Institute of Hydrobiology in Wuhan, capital of Hubei province, check the health of a rare finless porpoise that was shipped from Poyang Lake on May 25. A severe drought last year posed a serious threat to the mammals' survival. "We used to regard them as river gods; we'd never hunt or hurt them," he said, explaining that they are seen as "guides" because they are usually spotted in areas where fish are in abundance. "We all depend on fish to survive," he said. "If the lake environment worsens and there are fewer fish, the porpoises die and we won't be able to make a living." Since April, He and another 10 friends have been patrolling the lake, hoping to protect the animal from illegal fishing techniques, such as electrofishing. "These destructive methods kill all the life, including small fish, which are the main food source for finless porpoises. Sometimes the porpoises are injured or killed, too," said He, who has already persuaded several fishermen to be more eco-friendly. Yet, fishermen alone cannot solve the problem. Studies show that the porpoises, which are found only in the Yangtze River and Poyang and Dongting lakes, have also been affected by pollution, busy water traffic, extreme weather conditions (mainly droughts) and the construction of hydropower projects. A three-year field survey recently completed by the Institute of Hydrobiology of the Chinese Academy of Sciences and the World Wide Fund for Nature (WWF), the international wildlife NGO, found about 1,000 finless porpoises, down from an estimated 1,800 in 2006. The findings suggest the population is reducing by 6.4 percent every year, although the rate is much higher in Dongting Lake, where only about 120 now remain. Although the animals have a history dating back more than 25 million years, Wang Ding, former deputy director of the institute, predicted that the species could be extinct in a decade if measures are not taken to protect them.

Trade tensions between China and the United States may be exacerbated by the global financial outlook and US election politics, economists said. "What I worry about are trade tensions between China and the US," Stephen Roach, senior research fellow at Yale University's Jackson Institute for Global Affairs, told China Daily in Davos during the World Economic Forum. Roach did not elaborate on who was to blame for growing trade tension. But he described China as his "favorite economy" because it has weathered economic challenges without sacrificing the interest of other economies. "I don't think trade friction between China and other economies will grow, but my worry is about (the frictions between) China and the US," Roach, an expert of the Chinese economy, said. "Trade tensions are going to be a major feature amid the shift in the global environment in the next few years." Roach said that he was hopeful over another challenge facing China: transforming China's economy from one that focuses on trade and investment to one based on domestic consumption, as indicated in the 12th Five-Year Plan (2011-15). "I am optimistic that China will do it," he said. At a panel discussion on whether emerging markets can deliver global growth, Li Daokui, policy adviser of China's central bank and director of the Center for China in the World Economy at Tsinghua University, also listed trade tensions between China and the US as a concern. "We must pay close attention to growing trade tensions between China and the US," said Li, adding that protectionism does not help protect US jobs. Tension between the US and Iran is also something that should be taken into account, Li said. "If this situation erupts, global oil prices will surge and the supply could be disrupted. This will have a huge impact on emerging economies, such as China," Li said. Since the financial crisis in 2007-08, emerging economies such as China, India and Turkey, have become the driving force of global economic growth. China is expecting to achieve about 8 percent growth this year, while advanced economies are close to recession, economists predicted. "If trade tensions (between China and the US) grow I am afraid this will further dim the already gloomy economic outlook," Li said. Chinese enterprises have faced growing US trade protectionism. "We welcome the US government to create a fair environment in which its enterprises can compete instead of using punitive measures," said Gao Jifan, president of China's leading solar power equipment producer Trina Solar. Gao was referring to the US launching anti-dumping investigations against Chinese solar panel manufacturers. US President Barack Obama's State of the Union address, during which he targeted China, was a particular issue of concern for Gao. "I understand this is election politics," Gao said. "But it is also very clear if the US takes tough measures, jobs in his country will decrease instead of increase." Gao's company has set up one of its four overseas headquarters in the US. "So I think it is wrong for the US president to play the China card, especially a card against Chinese enterprises," Gao said. "If it continues, China suffers, our US clients and employees suffer, and the world economy suffers." But in a panel discussion in Davos, US Trade Representative Ron Kirk dismissed any possible trade war. When asked by China Daily what were his grounds, he replied: "The best insurance I will give to China is the $300 billion in trade surplus between China and the US."

Hong Kong*:  Jan 31 2012 Share

Four MTR stations are being given a new look to make them more accessible to the public at a cost of HK$160 million. While work at Mong Kok East is now complete, renovations at Sha Tin, Fan Ling and Sheung Shui stations are ongoing, and should be completed by the middle of next year. Chief architect Wilfred Yeung Sze-wai said the aim of the work is to improve the appearance of stations and make them more accessible. Increasing shop space is not a consideration, Yeung said. "`In Touch with Nature' was the main theme adopted when renovating the four stations," he said. "In Mong Kok East station, natural materials and colors have been used to give it a brighter, more spacious and comfortable look, and to provide a natural atmosphere for passengers to get closer to nature." For Sheung Shui and Fan Ling stations, Yeung was inspired by the River Beas, which flows across the northern New Territories. In all of the stations ticket machines are being removed from the center of concourses and mounted on walls to create more space for larger flows of passengers. Customer service centers are also being revamped to make them more accessible to all passengers, including the disabled, and will be placed in the center of concourses, closer to the entry and exit gates. Passengers have welcomed the work being carried out but are concerned at the cost of up to HK$40 million for each station. Clara Cheuk said the renovations are far too expensive. "It would be fine just to improve the facilities, but I do not think it is worth spending on artifacts just to brighten up a station." However, Cheuk is worried the cost will result in higher ticket prices. Yeung said MTR Corp will set aside HK$4 billion each year to upgrade, revitalize and maintain facilities at stations.

Before Lunar New Year, the consumer market was booming. Small businesses interviewed by the media all said business had grown a lot compared to the previous year. Citizens said because the government handed out HK$6,000, they were more ready to spend. Being hard hit by the European debt crisis and correction in property prices, the consumer market should in theory not have done so well. The power of HK$6,000 is indeed great. Last year, I was against the handing out HK$6,000 under pressure, thinking that once the government set a precedent, it would come under great political pressure when the scheme was scrapped or the handout made smaller. The economic benefit of the cash handout is beyond my expectations. The effect has been better than that of a tax rebate. This is because the HK$6,000 is not a small sum to the grassroots. It increases their daily spending. But a tax rebate only benefits those in the middle class who pay tax and the amount rebated is only a very small portion of their income. Also, the upper limit of a tax rebate covers only those with higher income levels. It would be even more difficult for a tax rebate to make them spend more. The HK$6,000 serves to send out a clear message, too. If tax is returned in certain proportions, different people will get different amounts and a very small section of the people will get the maximum rebate, which means it will be difficult to have a unified and clear message. In addition to the handout, there was also a maximum of HK$6,000 in tax rebates last year. But how many people talked about the rebates? It could be seen that the cash handout worked much better. As the message was clear, businesses were more willing to create spending opportunities tailored to the handout, which further stimulated spending. The economy in the Year of the Dragon will not produce a stellar performance as the European debt issue has not yet been solved. Hong Kong and the mainland are also still trying to curb their property markets. If the government wants to continue giving out sweeteners in the coming budget, it must not only continue with the cash handout but also consider making a bigger handout while cutting the tax rebate. Media guru KK Tsang, CEO of GroupM, takes a candid look at life.

 China*:  Jan 31 2012 Share

People visit Yuyuan Garden yesterday in Shanghai despite the rain to take a look at dragon lanterns and soak up the holiday atmosphere. Yuyuan Garden once again was the city's most popular tourist attraction during the Spring Festival. More than 2.7 million visited the site in the past seven days.

The Chinese zodiac's 12 animal signs are always popular symbols in both East and West. And when the Lunar New Year arrives, enthusiasts all over the world are eager to get their hands on the best collections. This year, the focus is on stamps. Han Bingbin reports. As a zodiac mascot, the dragon soars above its peers as the symbol of the year. Compared to the rabbit (which just gave up its one-year reign), the ox, rat, snake, monkey, pig, goat, rooster, tiger, horse and dog, the dragon is a notch above. Why? Because it is the only mystical beast in the zodiac barnyard and it also bears the aura of aristocracy. Its fire-breathing looks sometimes give rise to a misunderstanding. For example, the official dragon stamp released to commemorate the Spring Festival this year was criticized for its ferocious demeanor. Chinese netizens were quick to criticize the image on the stamp as "overbearing" and asked if it should not have been more benign. Designer Chen Shaohua say his dragon stamp this year was inspired by the motifs on the imperial Qing robes and Nine Dragon Wall in the Forbidden City. The stamp's creator, designer Chen Shaohua defended his design online in his blog, carefully avoiding confrontation by refusing media interviews. The dragon's role in mythology was to ward off evil, he says. As a deified image passed down through generations, it deserves the respect and dignity of preserving its legendary reputation, and should not be subjected to arbitrary changes. 

Hong Kong*:  Jan 30 2012 Share

Chief Executive Donald Tsang spells out his warning to Europe's leaders in Davos yesterday. Chief Executive Donald Tsang Yam-kuen underlined yesterday the gravity of the crisis gripping the world economy, admitting he has "never been as scared as now". Tsang and other policymakers from around the globe used the last full day of the World Economic Forum in Davos, Switzerland, to press Europe's leaders to halt its financial meltdown. At the forefront of concerns were debt write-down talks in Greece, which dragged into the weekend and threaten to overshadow a European Union summit tomorrow designed to showcase the continent's plans to escape its mountain of debt. "You need decisive action, you need overkill. You need to inspire confidence," Tsang told Europe. "That confidence must come from the decisive action of governments working together and doing it quickly," he added, saying that delays had already cost billions in debt that was mounting unnecessarily. "Two months ago in Greece you can do with 20 per cent haircut. Now even 50 per cent is not easy, maybe 70 per cent is needed. So do it quickly. "You need resolution and you need decisiveness," he said, talking of the reduction in payments on Greek sovereign debt that private creditors will need to accept. Tsang has four decades in public service that spanned other serious economic downturns such as the 1997-98 East Asian financial crisis. As financial secretary in August 1998, at the height of that crisis and with Hong Kong's currency under speculative attack, he poured billions of dollars of government money into the city's stock and futures markets, sparking a rebound in investor confidence. The hugely controversial move was later widely praised. Other global financial officials were also critical of Europe's leaders, saying failure to deliver home-grown solutions would rule out any chance of further outside support. It would also undermine the International Monetary Fund's push for more crisis-fighting resources of its own. The concern tempered earlier optimism that Europe had succeeded in calming financial markets. On Friday, Fitch Ratings downgraded the sovereign debt of Spain, Italy and three other euro countries. IMF managing director Christine Lagarde said: "It's a crisis that could have spillover effects around the world. It is critical the euro zone members develop a clear, simple firewall that can limit the contagion." As the officials debated in Davos, the Greek government was in talks with private lenders on a €100 billion (HK$1 trillion) debt write-down designed to return the country to solvency and contain the problem. A failure could force Greece, which is now in its fifth year of recession, to default on its debt and quit the euro, potentially triggering another wave of mayhem. "The fact that we're still, at the start of 2012, talking about Greece again is a sign that this problem has not been dealt with," British finance minister George Osborne told his fellow senior finance officials. "The danger here is that the tail wags the dog throughout this crisis." Tomorrow, the leaders of the 27 EU member states will meet in Brussels, Belgium, at a summit called to agree details of their "fiscal compact" deficit-reduction plan.

Eric Wong, boss of Galaxy Stars, gets comfy in one his capsules, while a possible future customer gets some sleep one "floor" below. Wong expects the city's first capsule hotel to open within six months. Visitors to Hong Kong will soon be able to bag a single "room" for as little as HK$240 per night - but it will be no place for the claustrophobic. The city's first capsule hotel will be aimed at budget travellers and cash-strapped students, offering accommodation at a fraction of Hong Kong's average nightly rate. Eric Wong Wai-lun, boss of Galaxy Stars, spent a year modifying the standard capsule bed design so it would suit the market in the city. His company will supply the beds to hoteliers and he expects the first hotel to be ready within six months, subject to government approval. Capsule hotels first appeared in Japan more than 30 years ago and the country now has more than 300, with up to 700 capsules in each. While some liken the capsules to the cage homes inhabited by Hong Kong's poorest people, Wong says his stays at the hotels are always fun. "It's like you're an astronaut going up in a spaceship. When you're travelling, you are out all day and only need a place to sleep at night." Each capsule is made of plastic with steel reinforcements and is about the size of a single bed, measuring 1.9 metres long, 1.15 metres high and one metre wide. They come with a two-inch foam mattress and for fire safety reasons the capsules have no doors. They just have a simple screen that can be pulled down for privacy. Each capsule, weighing about 100kg, is fitted with air-conditioning, a smoke alarm, power outlets, light switches, a TV and small shelves. For every six beds, there will be a shared toilet and shower and the hotel will provide a communal area and lockers for luggage. Compared to capsule hotels across the Asia-Pacific region and Europe, Wong says prices in Hong Kong will be among the cheapest. He set up his business a month ago and says he has been approached by the owner of a three-star hotel who is negotiating to find a site in Yau Ma Tei, Mong Kok or Tsim Sha Tsui. "Over the past few years, the supply of hotel rooms has been very tight so I think there's a big market for cheaper hotels," Wong said. "There will be lots of tourists from the mainland when the [Guangzhou-Shenzhen-Hong Kong] high-speed rail is completed [in 2015]." The average price of a hotel room in the city last year was HK$1,343, according to the Federation of Hong Kong Hotel Owners, and room rates are expected to rise between six and 10 per cent this year. Wong has also spoken to several university student associations and if at least 15 students sign up to the idea, he will fit out a flat and rent them the capsules for HK$1,000 per month. Cheryl Yan, a student at the University of Hong Kong, pays about the same price to share a small room with another student. She said she would consider a capsule bed only if facilities such as the kitchen and storage area were better.

Wheelock (SEHK: 0020) said on Friday that it has appointed Stewart Leung Chi-kin as chairman of subsidiary Wheelock Properties, and as a vice-chairman and board member of the parent company. Leung, 73, takes over the role at Wheelock Properties from Peter Woo, who remains as chairman of the parent, according to a filing with the Hong Kong stock exchange. The appointments are effective as of February 1. Leung previously held a senior management position at New World Development, but resigned as a board member and adviser to the company as of January 1. He is also chairman of the executive committee of the Real Estate Developers Association of Hong Kong. The filing said Leung would receive a salary of HK$5.4 million per year, plus a discretionary bonus and a director’s fee of HK$60,000. Wheelock shares closed up 1.23 per cent on Friday ahead of the announcement, which came after the close of trade, outstripping a 0.31 per cent gain on the benchmark Hang Seng Index.

Shares of Li & Fung (SEHK: 0494) Ltd rose 4.4 per cent on Friday to the highest in eight months after the Hong Kong consumer goods exporter announced the first acquisition by its regional distribution arm LF Asia, fuelling hopes for accelerating expansion. Li & Fung shares rose to HK$18.58 on Friday morning, the highest since May 20 last year. At the noon trading break, the stock was up 2.6 per cent at HK$18.26 compared with a flat benchmark Hang Seng Index. “Li & Fung is building a new long-term earnings stream based on Asian brand consumption,” Daiwa Capital Markets said in a research note. “Kids is obviously going to be a big category for L&F in China … we expect more acquisitions to accelerate LF Asia’s development over the next six months.” Li & Fung announced before the Lunar New Year holiday last week that it had acquired the children’s apparel and toys operations in greater China of Roly Group in September last year for US$41 million, LF Asia’s first acquisition since the expansion of Li & Fung’s distribution business to Asia last year. The acquired businesses cover wholesale, retail and sourcing operations in greater China for licensed brands including Walt Disney Mickey Mouse and Winnie the Pooh, Elle and Sesame Street products. “This is the first acquisition by Li & Fung for its LF Asia operation. We are positive on the progress,” Deutsche Bank said in a research note. Li & Fung said LF Asia would divest the apparel retailing business acquired from the Roly Group to a subsidiary of privately held Li & Fung (1937) Ltd for US$17.8 million. “We believe Li & Fung will concentrate on organic growth in its traditional sourcing business,” Daiwa said, adding that the group had kept the non-retailing part of its business model intact as it divested the retail business. Li & Fung, manager of supply chains for retailers including Wal-Mart Stores and Target, said it expected the uncertain environment in Western economies to continue for the better part of its three-year plan ending next year, while Asia would expand.

According to Chinese tradition, the Year of the Dragon starts strong before tailing off into something more mediocre. Shares listed in Hong Kong are fulfilling the first part. The Hang Seng Index is up 1.9% since it reopened Thursday after the three-day Lunar New Year break. A shift in the Chinese zodiac provides a nifty explanation—but there are earthly causes, especially the prospects of policy easing in China and more positive signs from the U.S. and Europe. Among the big gainers is sourcing giant Li & Fung, which is quickly putting a bad Year of the Rabbit behind it. Shares in the company, which sources products for retailers such as Wal-Mart, lost about a third of their value in 2011 on concerns about rising labor and commodity costs and weak consumer sentiment in the U.S., where most of its sales come from. But Li & Fung's shares are staging a rally lately, up 28% so far this year, including a 3.4% jump on Friday. Healthier indications from the U.S. are the main factor. But the company also announced, just before the New Year break, that one of its divisions—LF Asia—bought a sourcing and merchandising business for children's clothes and toys in China, including the brand licenses for Disney and Sesame Street. The $41 million acquisition is not a big deal at first glance. But it represents the first step in a smart strategy by Li & Fung aimed at customers closer to home. "We don't think that the market is as yet fully appreciating the opportunity that LF Asia represents," says Daiwa Capital Markets analyst Matthew Marsden. "Li & Fung is building a new long-term earnings stream based on Asian brand consumption." A downturn in the U.S. economy or a hard landing in China could still see Li & Fung's Year of the Dragon take a turn for the worse. So far, though, the company is off to a flyer.

 China*:  Jan 30 2012 Share

Jia Qinglin held meetings in Ethiopia with African leaders. China's top political adviser, Jia Qinglin, was at the opening ceremony of the 18th African Union (AU) summit in Addis Ababa yesterday to inaugurate its new, Beijing-funded headquarters there. The US$200 million, 113-metre-high complex was built on 110,000 square metres of land provided by the Ethiopian government, according to the AU website. "The AU Conference and Office Complex, built with China's assistance, is a symbol of our profound friendship that will go down in the history of China-Africa friendly relations," Jia, chairman of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), said on Friday. "Since the establishment of diplomatic ties 42 years ago ... China and Ethiopia have had fruitful exchanges and co-operation in political, economic, trade, cultural and other fields and enjoyed ever closer co-operation in international and regional affairs," he said. Construction of the building - which now dominates the skyline of the Ethiopian capital and is the city's tallest - began in January 2009, with some 1,200 Chinese and Ethiopian workers involved. Most of the building materials used were imported from China and even the furnishings were paid for by Beijing, earlier reports said. The centre will offer all the facilities of an international-standard conference centre and the AU will host key meetings there. Jia is the most senior official from Beijing to attend the summit. The Foreign Ministry said he would also hold talks with Teodoro Obiang Nguema Mbasogo, the president of oil-rich Equatorial Guinea and current holder of the AU's rotating presidency. Jia held talks with Ethiopian president Girma Woldegiorgis and Prime Minister Meles Zenawi and pledged more investment in the country. Jiang Yuechun , a professor at the China Institute of International Studies, a foreign ministry think tank, said Jia's high-profile presence at the summit indicated that both sides were willing to develop long-term diplomatic and economic ties. "Beijing has good experience dealing with our African friends, not only getting their votes in the United Nations, but also in terms of economic co-operation," Jiang said. "China holds the biggest foreign-exchange reserves and we need to find an overseas market for our investment. Africa is the biggest potential market because of its rich resources and land." He said many Chinese enterprises, such as Haier - the world's largest refrigerator and washing machine maker - were also looking to Africa as a potential new market. "This is a win-win because China has the money, the labour and the experience of building infrastructure, which our African friends need, and we need their rich resources to help us to boost our economy," he said. Sino-African trade rose more than 23.5 per cent to over US$160 billion in 2011, up from US$129.6 billion in 2010, deputy commerce minister Gao Hucheng said on Friday. China overtook the United States as Africa's biggest trading partner in 2009. China's cumulative investment in Africa totals US$40 billion, including US$14.7 billion of direct investment, with more than 2,000 Chinese-invested firms there, Gao said.

A Chanel store in Beijing. Before the Christmas period, many luxury companies began to increase the prices of their goods. However, this won't do much to affect the demand from wealthy consumers. Many luxury brands have made their annual price adjustments for certain products, with increases of more than 10 percent since November, but that hasn't dented Chinese customers' taste for upmarket items. The price hikes for bags and cosmetics began before the annual sale period for Christmas in December, led by well-known brands such as Chanel, Gucci, Celine and Bottega Veneta. The price on a bag made by Celine known as the "IT bag" went up in the middle of November in Europe, America and the Asia-Pacific region. In China, the price went to 17,500 yuan ($2,770) from 16,000 yuan.
Gucci also raised the prices of its bags by about 10 percent. In November, the prices of leather products from Bottega Veneta were lifted for the second time in 2011. Prices were increased more than 30 percent in April. At the end of last year, Chanel wrapped up its annual price adjustments on classic bags and cosmetics, with increases of up to 10 percent globally. "Like other luxury brands, we evaluate and alter the prices of our products regularly based on exchange rates and the costs of production and raw materials," said an announcement from Chanel. The announcement also noted that limited supplies of top-grade leather, used in all Chanel bags, directly affected the prices of the products. Tiffany, the well-known jewelry brand, declined to comment on price changes. The company said that it had changed the prices of certain products to reflect a maturing market. "Luxury brands have been increasing prices simultaneously worldwide around Christmas in the past few years, driven by an obvious increase in some raw materials," said Yuval Atsmon, a partner in McKinsey & Co's Shanghai office. However, said Atsmon, "in China, this hasn't so far slowed down consumers. In some cases when applied to classic or iconic goods, it has even given consumers the sense that those (products) appreciate in value and therefore buying them is a good investment." For wealthy consumers in China, annual price adjustments for luxury goods won't do much to affect demand. "I've noticed the prices of luxury products have risen gradually, but I still need to buy these famous brands to fill my wardrobe from time to time," said Yu Shenghui, a businessman from Wenzhou, Zhejiang province, who spends at least 500,000 yuan on luxury goods purchases every year. Yu added that annual increases in the prices of luxury goods are acceptable, because most daily necessities are also becoming more expensive due to inflation in China. Sales of luxury goods in the country reached 212 billion yuan in 2010 and probably grew 25 to 30 percent in 2011, with new customers accounting for more than 60 percent of the purchases, according to a survey released last month by Bain & Co, an advisor to the global luxury goods industry. "Our view remains that the luxury market will continue to see strong growth, although considering the explosive growth of past years, it would be a little slower in comparison," said Atsmon. He added that the increase in the number of wealthy people, as well as an expansion of the upper middle class, will fuel the growth of the luxury market. Much of the growth would come from new consumers, he said, with some help from the increased wealth of current buyers. Li Qingxing, secretary-general of the China Luxury Industry Association, suggested that luxury consumers in China are still not sophisticated enough to make their own brand choices and thus turn to luxury brands. "A variety of luxury brands have expanded their network in China to attract more potential customers as more Chinese people get wealthier and recognize luxury goods as a status symbol," said Li. He added that as long as Chinese consumers chase the dream of a life filled with luxury, higher prices wouldn't stop them from shopping.

The New York-based NGO Human Rights Watch issued its World Report 2012 on Jan 22, observing China's human rights conditions from angles of defendant rights, judicial reform, freedom of speech and religious freedom. The report seriously lacks in objectivity and impartiality. Its conclusion intentionally distorts China's human rights conditions. Its observation of China's judicial reform is extremely inconsistent with facts and one-sided. The report says the public security departments dominate the criminal justice system and rely excessively on the defendant's confession. The weak courts and seriously limited rights of defense mean forced confession is still universal and judicial partiality is common. This is serious distortion. It is known that China's criminal justice system is not controlled by public security departments, but consists of investigation and procuratorial organs as well as people's courts. China's Criminal Procedural Law clearly stipulates the labor distribution among the three parties. They work with and check against one another. The proposal for prosecution by public security departments must be examined by procuratorial organs before it is recommended to the court to initiate a public prosecution. The public prosecution of the investigating organs must go through the court's open and fair trial, during which the defendant's opinions and all kinds of testimony must be verified, before becoming part of the court's decision. In this process, it is common for the procuratorial organs to require public security departments to file a case (or not), the procuratorial organs decide to prosecute (or not), and the people's courts declare the accused guilty (or not). These possibilities all restrict the power of public security departments. In judicial practices, public security departments must follow or respond to the procuratorial organs' procuratorial proposals and supervision of filing a criminal case. According to the Supreme People's Procuratorate's work report to the National People's Congress in 2011, all procuratorial organs proposed 33,863 times and cases to correct the public security departments' illegal practices of investigation. The number of cases in which the procuratorial organs do not ratify an arrest, do not prosecute, withdraw a lawsuit, and the people's courts decide the accused innocent, is increasing proportionally year by year. All of these actions are restricting the public security departments' power effectively. Besides, according to the seventh article of the Regulation on Exclusion of Illegal Evidence issued in June 2011, if the courts are doubtful of the legitimacy of the defendants' confessions obtained before trial, the courts can insist that the questioners take the stand in courts. All these examples prove that China's criminal justice system is not controlled by the public security departments. It is an integral system made up of the three parties, each with clear duties, with the people's courts' rights of sentencing and measurement of penalty as the core. Excessive dependence on defendants' confessions is decreasing remarkably. The role and rights of defense counsels are increasing steadily. Forced confession is strictly forbidden. The regulations on the exclusion of illegal evidence and on evidence in death penalty cases issued in June 2010, as well as the draft amendment to the Criminal Procedural Law released in Aug 2011, all reflect important progress in the protection of human rights. But the Human Rights Watch report fabricates and speculates on "an article of secret detention" of the draft amendment, which no longer exists. In fact the draft amendment issued in August 2011 includes an article about notice of detention. That is big progress compared with related articles of the law in 1996. According to the 84th article of the draft amendment, the public security departments must present detention warrants when detaining anyone, who should be sent to the detention center within 24 hours after being detained. The detained person's family should be notified about the detention reason and the detention center location within 24 hours after detention, except for serious crimes such as those endangering national security, terrorist crimes. There are exceptions, if it is impossible to notify, or if the notice may obstruct investigation. The 64th article of the Criminal Procedural Law of 1996 only stipulated that the public security departments must present detention warrants while detaining anyone. The detained person's family or work units should be noticed about the detention reason and detention center within 24 hours after detention, except if it is impossible to notify, or the notice may obstruct investigation. This amendment of the 84th article is just to strengthen the public security departments' obligation to notify and protect the suspects' families' rights to know. The report of Human Rights Watch does not mention progress in the draft amendment at all and only fabricates non-existent misleading articles. In the draft amendment, forced confession is prevented; exclusion of illegal evidence and its procedure are added, standard of proof of criminal procedure is clarified; the definition of "social danger" is clarified; the obligation of persons obtaining guarantor pending trial is regulated to lower detention rate; designated monitored residence can be converted to prison term; technical investigation is authorized and regulated; the recording system in inquest is strengthened, investigation defense system is formed and clarified, the number of remand for retrial is limited, the criminal reconciliation procedure is clarified; the system of sealing up criminal record of juvenile crimes and deferred prosecution is regulated; mental illness treatment procedure is regulated, and inspection and supervision of implementation are strengthened. These active changes reflect the main progress in China's judicial reform in 2011. Compared with the former one in 1996, more than 60 articles are added and more than 90 articles are amended in the draft amendment. Remarkable breakthroughs in judicial reform have been made in 2011 in measurement of penalty, State compensation, mediation, trial management and implementation procedure. It is a pity the report of Human Rights Watch turned a blind eye to all these positive steps and Chinese authorities' effort to promote judicial reforms, and only focuses on some non-existent articles.

Attention to detail defines the experience at Mokihi, one of a bevy of Japanese whiskey bars that have taken root in Beijing. Single-malt, 18-year-old Scotch mixed with bottled green tea, anyone? The concoction — the subject of many a nightlife horror story by visitors to China — isn’t as popular as it used to be, but it remains an apt metaphor for Beijing’s nightlife, which prefers its high with a splash of low. That distinguishes the city from the more Westernized Shanghai. “In Shanghai, it’s about how much money you can spend,” says Leon Lee, a San Franciscan who owns bars in both Shanghai and Beijing. “Beijing is edgier, a little rough around the edges,” he adds. “It’s more fun to go out in Beijing.” As money and mixologists have streamed into the city, its upscale options have grown. Start by checking out Sanlitun, Beijing’s preeminent drinking district. Once a sweaty Babylon where shadowy figures tried to beckon male visitors to “lady bars,” Sanlitun is now home to Nali Patio, a six-story, Mediterranean-themed courtyard complex that houses several bars and restaurants. Here, the main attraction is Apothecary, a sleek, third-floor speakeasy. Run by Mr. Lee, its extensive drinks menu doubles as a cocktail-history textbook and includes an expertly executed Old Fashioned (with optional bacon-infused bourbon) and an Earl Grey martini made with handcrafted bitters and topped with whipped egg whites. Prices are reminiscent of Manhattan, but so is the quality. Other Nali Patio options include Enoterra, a welcoming wine bar on the fourth floor, and Migas, a Spanish restaurant and bar with an industrial-chic dining room and an expansive rooftop patio. For a quieter night out, go east of the Third Ring Road to an entertainment district known as Lucky Street. There you’ll find Mokihi, an unassuming Japanese whiskey bar located on an upper floor along the southern end of the street. Bypass the main room for the back area, where bartenders ply their trade in a room lined with bottles of single-malt whiskey and infused liquors. If you’re hungry, order a plate of Wagyu sashimi from K’s Kitchen next door, and pair it with a wasabi martini. To go deeper into Beijing’s soul, head inside the Second Ring Road to Dongcheng. An older part of the city, Dongcheng is one of the last repositories of the city’s beloved hutong — maze-like alleyways where history, politics and culture brush up against each other to fascinating effect. Few nightlife spots epitomize that better than Yugong Yishan, a music venue inside a complex that once housed the government of warlord Duan Qirui. It hosts everything from punk rock shows to film screenings to underground rebel bingo and keeps its patrons well lubricated with cheap Tsingtao. A few kilometers away is Gulou Dongdajie, a street teeming with pubs, guitar shops and vintage clothing stores that serves as Beijing’s answer to San Francisco’s Haight Ashbury neighborhood. In a courtyard house tucked away in an alley, you’ll find Amilal, one of the favorite haunts of the city’s expatriate literati. Run by a Mongolian photographer who uses the space to host exhibitions of his friends’ work, it’s an excellent place to decompress after taking in a live show. Another hutong option is Mao Mao Chong, a five-table bar that does a steady trade in China-themed mixed drinks such as the Maojito, a gingery take on the Mojito, and the Jing Fling, a cocktail based on China’s not-for-the-faint-of-heart baijiu liquor. If you’re still going strong at midnight, two after-hours destinations, Lantern and Haze, beckon. Lantern, run by Beijing electronic-music label Acupuncture Records, ministers to heaving weekend crowds. Haze caters to hipsters and offers the added late-night challenge of being located at the bottom of one of the city’s most perilous staircases.

Federal Bureau of Investigation agents earlier this week searched the New York offices of private-equity investment and corporate-advisory firm New York Global Group, which has played a role in Chinese companies that list their securities in the U.S. through reverse mergers, a New York FBI spokesman said Friday. The spokesman, James Margolin, said the search was conducted Wednesday in connection with a continuing investigation. He declined to comment on the scope of the investigation or whether New York Global Group was a target of the probe. A spokeswoman for New York Global Group didn't immediately return a phone call seeking comment Friday. Reverse mergers are a way for small private companies to obtain U.S. listings without going through the more rigorous methods of going public, such as an initial public offering. In a reverse merger, the private firm merges with a public shell company. There have been questions about accounting practices at dozens of Chinese companies that have gained U.S. listings through such mergers. Last year, Securities and Exchange Commission Chairwoman Mary Schapiro said the regulator was weighing several options to address concerns about the proliferation of the practice, used frequently by Chinese firms. On its website, New York Global Group touts the expertise of its president, Benjamin Wey, and the firm, in China-related transactions, saying the firm has executed more than 200 such projects "in the areas of M&A, research, direct investments, market entry and due diligence." Mr. Wey, who at one point spelled his last name as Wei, has previously run afoul of U.S. securities regulators. In 2002, Mr. Wey, without admitting nor denying wrongdoing, was fined and briefly suspended by the National Association of Securities Dealers, a former self-regulatory organization. While working as a stockbroker in Oklahoma in 1999, he allegedly maintained accounts over which he had discretionary authority without providing written notification to the firm, according to the Financial Industry Regulatory Authority, the successor regulatory body to the NASD. Three years later, Mr. Wey, again without admitting nor denying wrongdoing, agreed to be censured by the Oklahoma Department of Securities and to not apply to serve as a broker-dealer or investment adviser in that state. According to the censure order, Mr. Wey allegedly made recommendations to at least two Oklahoma residents for the purchase of shares of three companies without disclosing "the risks associated with the purchase of these securities" and allegedly made at least one trade a customer claimed was unauthorized. The Oklahoma probe also found that Mr. Wey allegedly failed to disclose to his customers consulting agreements with two of the companies, including one in which Mr. Wey would serve as the "U.S. representative" of a Chinese company owned by his sister. Mr. Wey also figured prominently in a shareholder lawsuit against Bodisen Biotech Inc., a Chinese maker of organic fertilizers which was delisted in the U.S. in 2007. The shareholder suit claimed Bodisen relied heavily on Mr. Wey and New York Global Group. The lawsuit, which was dismissed in 2008, alleged that Bodisen ultimately received a deficiency letter from the American Stock Exchange in November 2006 for making insufficient or inaccurate disclosures in its public filings about its relationship with New York Global Group. Bodisen, in a news release at the time, said it had terminated its relationship with the consultancy firm before receiving the letter. At the time, the exchange also expressed concerns about internal control issues related to Bodisen's accounting and financial reporting obligations. Bodisen was ultimately delisted the next year.

China's Nasdaq-style ChiNext board has raised 195.9 billion yuan($30.99 billion) for the country's start-up firms by the end of 2011, according to statistics from China Securities Regulatory Commission (CSRC). Statistics show that by the end of 2011, 281 companies were listed on the ChiNext board of Shenzhen Stock Exchange, with a combined market value of 743.4 billion yuan. During the 2008-2010 period, ChiNext-listed companies reported a 38.4 percent year-on-year rise in profits on average. Moreover, more investors have opened ChiNext trading accounts with the institutional investors holding around one third of the market value. The board has been very supportive of the development of high-growth companies and those in the strategically important emerging industries, according to the CSRC. Statistics show that companies in the strategically important emerging industries, including new energy, new-type materials, environmental protection and energy conservation, information technology and bio-pharmaceutical sectors, account for 88.19 percent of all the listed companies. The ChiNext Board, which started trading on October 30, 2009, mainly lists hi-tech companies and those with high growth potential. By the end of 2011, 630 companies applied for ChiNext IPO and 314 companies have got the IPO approval.

Firefighters spray water to put out a forest fire in Lijiang, Yunnan province. Fire broke out in forests at the foot of the Dongshan Mountain in Baisha township of Yulong County in Lijiang and thousands of firefighters are still struggling to put out the flames, the local government said. Thousands of fire fighters are battling a blaze in the forest near the famous town of Lijiang in the southwestern province of Yunnan. State media say investigators were looking into the cause of the fire in the area popular with tourists. While all visible flames had been extinguished by Friday morning, high winds continued to pose a threat of re-igniting sparks and hot spots. The Xinhua News Agency said the blaze broke out on Thursday morning and burned about 45 hectares around Lijiang’s Yulong Snow Mountain. About 3,000 people were fighting the blaze, including paramilitary troops and volunteers. Lijiang is famous for its high mountain scenery and the unique culture of the Naxi people.

Li Daokui, director of the Center for China in the World Economy and an advisor to the People's Bank of China, pictured during a TV debate at the Dalian World Expo Center in Dalian in September. China will probably engineer a soft landing, with economic growth slowing to about 8.5 per cent this year from 9.2 per cent in 2011, Li said on Thursday at the World Economic Forum in Davos, Switzerland. China will probably engineer a soft landing, with economic growth slowing to about 8.5 per cent this year from 9.2 per cent in 2011, Li Daokui, an adviser to the country’s central bank, said on Thursday. Inflation, which has troubled China for much of the past year, is also likely to ease to about 3 per cent from 4.5 per cent in 2011, said Li, who sits on a board that advises the People’s Bank of China. “Anyone who has any understanding of China will agree that we will be able to achieve a soft landing,” Li said on the sidelines of the World Economic Forum in Davos. “Real estate prices will also ease slowly, which will help cool the economy and bring down price pressures.” China’s inflation rate dropped to a 15-month low of 4.1 per cent in December, just ahead of market expectations, extending an easing trend of the past five months and raising expectations that the central bank may ease monetary policy. Beijing has already begun cutting the ratio of cash banks are required to hold in reserves, in a move to boost corporate credit lines and help companies cushion falling demand at home and abroad. Li expects China’s economy to be hit by the problems in the euro zone, although he said he was opposed to China buying Italian or Spanish sovereign debt. “How are we going to explain to the Chinese people that we are going into it alone and buying up Spanish or Italian debt? A multilateral solution is needed, and China should work together with countries like Brazil or India to help Europe,” he said.

A low-cost maglev train rolls off the assembly line yesterday in Zhuzhou, central China's Hunan Province. The three-carriage train, with a designed top speed of 100 kilometers an hour, is suitable for mass transit, inter-city travel and trips in scenic areas. CHINA'S new medium and low-speed maglev train rolled off the production line yesterday in central China's Hunan Province. The three-carriage train is designed to run at a maximum speed of 100 kilometers per hour and carry 600 passengers, Xinhua news agency reported, citing Xu Zongxiang, general manager of the manufacturer, Zhuzhou Electric Locomotive Co Ltd, a division of China South Locomotive and Rolling Stock Corp. Xu called the train "environmentally friendly," as it's much quieter than conventional trains, with zero emission. The manager said the company is in talks with some cities about future operations. China's only maglev line in commercial operation - the world's first - runs in Shanghai, connecting a Metro station to Pudong International Airport. The maglev, put into service at the end of 2002, tops out at 430 kilometers per hour. The 30-kilometer route takes less than eight minutes. Maglev is short for magnetic levitation. The train can attain high speeds and is quiet because rather than ride on the rails with wheels, it hovers centimeters above the track through the use of magnets. According to Xu, the company has minimized the risk of the new maglev train derailing or overturning. "It's ideal for mass transportation, as it is quiet and environmentally friendly," said Xu. "Its manufacturing cost is about 75 percent of a conventional light-rail train." Railway transport specialist Liu Youmei said the new train is economical and safe. "It can be used for public transport in populous areas and at scenic spots with fragile environments," Liu told Xinhua. Liu said China is one of a few countries that have applied maglev technology. "I believe that the project will be accepted by the public, and the future market is huge," Liu said. But maglev lines have met with controversy. Shanghai residents protested a plan to expand the maglev route in 2008, concerned about radiation and other issues in densely populated downtown areas. The plan was scratched until news emerged in 2010 that a maglev line connecting Shanghai to Hangzhou in neighboring Zhejiang Province had been approved. Soon the project saw another twist as construction was suspended last year amid the opening of the Shanghai-Hangzhou high-speed railway line, which opened in October 2010. The public questioned the need and high cost of the maglev. Xinhua also reported that Beijing is building a maglev route, the Daitai line, which will start at an IT center in Haidian District and end in the capital's western outskirts. The line is scheduled to begin operations next year.

Fireworks could be seen all over Shanghai from last night to the wee hours of today, which is the fifth day of the Lunar New Year. According to Chinese tradition, the God of Fortune would come down from haven on the fifth day of a new lunar year. Many Chinese people would set off fireworks and crackers to welcome the God of Fortune. However, fireworks also caused many accidents in Shanghai. 

Jenny Laing-Peach sits in the Peace Hotel's Peace Gallery, which she is in charge of. For this Australian woman, Shanghai is a familiar place of family roots and culture as four generations of her family have worked on the Bund. She knows every story behind each building along the 2-km stretch of the Bund built during the last century. Despite her age of 67, she can climb up to the top of the Peace Hotel to point out exactly where these stories happened. Four generations of her family, from her grandfather to her son, have worked on the Bund, says historian Jenny Laing-Peach. To this Australian woman, Shanghai is a familiar place of family roots and culture, even though she was born, educated and worked in Sydney for the first half of her life. "I'm the third generation of my family to work as an executive on the Bund," says Laing-Peach, who came to Shanghai in 2000. "My grandfather worked in the Customs House during the 1890s and my father worked for a shipping insurance firm. It was in No 18 on the Bund, which now turned into Bund 18 (where Cartier and Zegna now sit) - that was his office on the second floor." "One of my sons has been restaurant manager of M on the Bund and I work here," says the in-house historian for Fairmont Peace Hotel, the 82-year-old symbol of the Bund. "I don't know if there are very many complete Chinese families who can do four generations on the Bund." Although Laing-Peach got her Irish face from her mother, her enthusiasm for Shanghai came from her father, who was half-Chinese. "My grandmother was Shanghainese and I could speak Shanghainese before I could speak English," she says. "It is a shame that I can't remember now." Laing-Peach says she migrated to Australia with her parents during World War II. "My father, like many people after the war, died of displacement - like a broken heart, even he managed to immigrate to Australia." "He knew he would never come back to China (for political reasons) because by then (1940s and 1950s) it was particularly difficult for those China-born with foreign wives to return to China," says Laing-Peach. "The rest of the world was very isolated of China (during the '50s). There was no news from China - I remember we could only get news in English from Hong Kong." "I also remember our garden in Sydney has been unusual - we always had those plants and flowers that were different to other people's - and I didn't know why. But as soon as I came here I understood, what my father was doing was building a beautiful Chinese garden," she says. Having lived with her husband, journalist Barry Porter, in Shanghai for 11 years, Laing-Peach said her return to Shanghai was a must. "I came here because this was my parents, uncle and auntie's home, this was what they talked about all days when they got to go to another country, where they didn't choose to go," she says. "I knew the map of Shanghai when I came here, often by old, non-Chinese names, and I knew exactly where to go." "I felt instantly a sense of belonging." With years of teaching drama in Sydney, Laing-Peach quickly found herself a job as a professor in Shanghai. "I worked at Shanghai University for eight years and I lectured in English, particularly in theater and drama," she says. "I wrote a course called Shakespeare with Chinese Characteristics and we did A Midsummer Night's Dream, where all the fairies were done in Peking Opera style, for one semester." "The pink-eye make up, costume and the singing style were all from Peking Opera. The performers were singing in both languages - English and Chinese - because who knows what language fairies speak," jokes Laing-Peach, adding that the play was staged in the Shanghai Dramatic Arts Center. Besides playing the role of theater director and teacher, she has also been involved in many culture- exchange events, such as the annual James Joyce "Bloomsday Shanghai" celebration. Laing-Peach co-founded the Shanghai International Literary Festival, where she wrote and published articles on the greatest historical figures of Shanghai, such as the renowned writer Lu Xun and the first mayor of Shanghai, Chen Yi. Starting in 2010, when the Peace Hotel - the green copper pyramid landmark of Shanghai - returned to the Bund after a three-year renovation, Laing-Peach became the legendary hotel's in-house historian. She's now in charge of the Peace Gallery, which showcases an almost 80-piece collection, ranging from antique tableware to crystal that decorated the hotel's old rooms. There is also a heritage salon and afternoon tea reading that usually features themes of Chinese literature and culture as well as a historical tour of the hotel and the Bund. In Laing-Peach's eyes, the image of the port city of Shanghai is exactly like Peace Hotel's octagonal-shaped atrium at the grand entrance - with many points of entry allowing for not only exchanging commodities but ideas. "It was no accident that jazz, film, the new way of writing (meaning left-wing writers such as Lu Xun), the new political theory and the communists' first meeting place all happened in Shanghai," she says. "Through all eight points of octagon, they all come to the middle," she says. From there, "Some go straight, some meet another line and go in a different direction. By meeting another line, they form a different shape - it's like people' lives being transformed by the experiences being in this extraordinary city." "Somebody once told me during the tour of Peace Hotel that 'You're a born storyteller'. I never thought that way," she says, "but I know one thing for sure - stories should be told. And I love sharing what I know about." 

A shop assistant displays a piece of gold jewelry at a gold shop in Qingdao city, East China's Shandong province, Jan 20, 2012. Gold price continued to rally as the US Federal Reserve pledged to keep interest rates low until late 2014 and gold future on the COMEX Division of the New York Mercantile Exchange rose to over 1,700 dollars(10,769 yuan) per ounce on Jan 25, 2012.

Hong Kong*:  Jan 29 2012 Share

Police cordon off an area at Ap Lei Chau Estate market yesterday during an investigation into the rape of a 21-year-old woman. A manhunt is under way after a 21-year-old woman was raped in an Ap Lei Chau market before dawn yesterday. The woman was attacked at about 3am after she got off an N171 cross-harbour bus at the South Horizons Drive terminal. Two minutes into her walk home, she was grabbed from behind and dragged into the Ap Lei Chau Estate market, police said. "She was pinned to the floor and sexually assaulted in one of the public corridors in the market," a police investigator said, adding that it was quiet at the time with no security guards nearby. Afterwards, the attacker jumped down a slope leading from the market and fled towards the South Horizons private housing estate, the officer said. He believed that the man injured himself as he escaped, as blood was found on the slope. The victim screamed for help and a passer-by called police, the officer said. She was taken to Queen Mary Hospital in Pok Fu Lam for treatment. The Cantonese-speaking attacker is thought to be aged about 25, of thin build and 1.82 metres tall. He was wearing a black jacket and jeans. Dozens of officers, including those from tactical and emergency units, were involved in a manhunt from 3am to 2pm. No one has been arrested. A second police officer described the incident as "serious and horrible", saying it was the first sex attack in the area since the beginning of last year. "We will look into whether the attacker followed the victim from the bus stop to the site," the officer said. Southern District councillor Chai Man-hon called for police guard posts or a greater presence at bus terminals and on main roads in the area to prevent more sex attacks and other crimes at night. "This would have a deterrent effect," he said. Police appealed to anyone with information to contact them on 2859 4258 or 2870 7200. Detectives from Western District crime squad are investigating the case. The number of reported rapes fell 18.8 per cent to 112 last year, down from 91 in 2010, according to police figures.

Some of the counterfeit banknotes produced from genuine overseas notes seized in Hong Kong. You would have to be in a real hurry not to spot these fake banknotes - ones with the security features of Hong Kong notes, but instead of a city landmark they bear the image of three unfamiliar rocks. The banknotes - genuine ones from Zimbabwe - had the name of a Hong Kong bank printed over them, police said in a warning to tourists and shopkeepers. Chief Inspector Tommy Cheng Ka-wai, an expert in counterfeit notes with the commercial crime bureau, said police found similar banknotes from Uruguay and Myanmar, which were probably altered in an attempt to deceive visitors and shops. "Anyone who is familiar with banknotes or has some general knowledge would know it is not a Hong Kong one when they see an image of three rocks," he said. Police had also found 10 old HK$10 banknotes that were overprinted as HK$500 notes. Visitors from the mainland or overseas probably brought them in, Cheng said. "The shopkeepers who received the money could have been very busy and did not look [carefully]. Some tourists may not even know [they are handling fakes] when they fork out several thousand dollars in cash." Police seized 109 genuine $1,000 notes from Zimbabwe printed with the name of Standard Chartered bank. Only a few such notes were seized in 2010, Cheng said, while two Myanmese banknotes and three from Uruguay were found last year. But almost twice as many Hong Kong counterfeit banknotes were found last year as in 2010, Cheng said. The most common fake denomination is the HK$100 note. "People may not pay attention to HK$100 notes, and it is easier to pass them off in [busy] places like wet markets," Cheng said. The rise in seizures and arrests was due to several operations last year in which 1,394 bogus notes were seized. Arrests rose to 28 from 12 the previous year. Police broke up two home-based syndicates manufacturing fake banknotes in July and October, arresting two people and confiscating 1,259 fake HK$100 notes. Separately, police arrested a taxi driver and his girlfriend in October and found 135 fake banknotes, after three passengers complained of receiving counterfeit notes. Many of the fakes were made on ink-jet printers at home and the quality was so poor that people could easily spot them. However, on average only two counterfeit Hong Kong notes are found for every one million genuine notes. Police seized 4,542 bogus renminbi banknotes last year - down 927 from the year before. Cheng said the drop was due to improved co-operation with mainland law enforcement agencies.

As many as 5,470 new units from a dozen property projects will likely come on the market following next week's budget. The 12 developments are in Tsuen Wan, Tuen Mun, Che Kung Temple, Ma On Shan, Fan Ling, Discovery Bay, Sai Wan, Hung Hom, Tai Hang Road, Ma Wan and Kowloon Shing. The highest number of flats, 1,720, will come from the TW7 development near Tsuen Wan West MTR station, jointly developed by Cheung Kong (Holdings) (0001), Nan Fung Development, and MTR Corp (0066). These will be two-to-four bedroom units sized between 660 and 2,000 square feet. Cheung Kong has hinted prices will be comparable to those at Festival City in Tai Wai - now costing between HK$7,900 and HK$8,300 psf. Sun Hung Kai Properties (0016) and MTRC are also expected to release flats from the project atop Tuen Mun MTR station, providing 1,100 units. A market source expects the flats to be priced between HK$6,000 and HK$8,000 psf. SHKP is also set to launch phase six of Park Island in Ma Wan soon, as presale consent has been received. It will provide 65 three-to-four bedroom units, sized between 1,200 and 2,200 sq ft. New World Development (0017), Wheelock & Co (0020) and Sino Land (0083) will also launch new homes. Meanwhile, Kerry Properties (0683) said it has pocketed HK$70.06 million by selling two flats at The Altitude in Happy Valley. The buyers are Dragon Era Holdings and Soaring Dragon Holdings owned by brother and sister-in-law of Kerry Properties' chairman Kuok Khoon Chen. Last month, the developer sold two flats and two parking spaces at The Altitude to its sister firm, Kerry Trading Co, for HK$94.83 million. Kerry shares rose 3.81 percent to HK$30 yesterday.

Former civil aviation chief Albert Lam Kwong-yu pleaded not guilty to insider trading yesterday over a trade in which he made HK$79,000. Eastern Magistrates' Court heard that the trade - which involved the purchase of 4,000 Hong Kong Aircraft Engineering Company and their quick resale - was made when Lam was a non-executive director of the company. HAECO chief executive Augustus Tang Kin-wing told the court he phoned Lam on June 4, 2010, to inform him that Swire Pacific planned to acquire 15 percent of the company's stock in a few days. Later, Lam phoned Tang back to say he had "mistakenly" purchased HAECO stocks at HK$84 each in the morning - before Tang informed him of Swire Pacific's planned share acquisition. Lam allegedly said he did not know directors were not supposed to buy HAECO shares once Swire Pacific's intentions were clear. He also allegedly admitted not informing the board chairman of his purchase. Lam is said to have told Tang he knew the purchase was against HAECO's internal policy and was willing to receive any punishment, including resigning from the company. Tang said Lam, under exhaustive questioning, admitted he bought the shares after being informed of Swire Pacific's impending share acquisition. Tang told deputy magistrate John Glass that Lam promised on June 5 to donate all the profits to charity, which he did. Tang said he then reported the incident to a HAECO legal adviser, who said the share purchase should be the subject of a public announcement to be jointly issued by HAECO, Swire and Cathay Pacific. Lam is being prosecuted by the Securities and Futures Commission. He resigned from HAECO a day before Swire bought the stock on June 7, 2010. Trading in HAECO shares was suspended on the day of the purchase and resumed the next day, closing at HK$104.20 - around 25 percent higher than the closing price during the last trading day. Swire bought the shares from Cathay at HK$105 apiece, increasing its stake to 60 percent. Lam, 66, joined the Civil Aviation Department as an air traffic control assistant when he was just 18. He became the airport's general manager in 1994 and deputy director-general of civil aviation in 1996. Two years later he became director and retired in 2004.

The Lantau cable car operator has been ordered to get its act together after a fault left 800 passengers hanging in the bitter cold for almost two hours. The backlash came as the government demanded Ngong Ping 360 crank up its service in three key areas. It must improve its contingency plans, tell customers what is happening and - if the service is suspended - let those with tickets know early. Secretary for Commerce and Economic Development Gregory So Kam- leung and other officials met with the operator's management yesterday to discuss Wednesday's incident - the fourth in six weeks - which left passengers fuming. So said the way the operator communicated with passengers during the incident is "unacceptable." He added: "It was cold. Ngong Ping 360 needs to improve its sensitivity to what the passengers felt when they were stranded." So said the operator - a unit of MTR Corp - needs a better contingency plan, which should take into account passengers' feelings and safety. And there has to be a mechanism to inform passengers as soon as an emergency happens. At present, announcements broadcast to the system inside the cable cars are pre-recorded. So demanded live announcements to give stranded passengers a clearer picture of what is happening. And if services are suspended, the operator must properly inform those who have bought tickets before they arrive at the terminals. Frank Chan Fan, the government's director of electrical and mechanical services - , said it took about two hours for all the passengers to get back on the ground because the cable cars needed to travel slower to ensure safety. Ngong Ping 360 managing director Wilson Shao Shing-ming said the cable car's manufacturer will arrive from Italy within a few days to carry out a full examination. Shao said on Wednesday the cars will stop running for about 10 days. The latest stoppage was blamed on a bearing fault. All seven bearings will be examined and replaced if necessary. Shao said the company makes a large- scale examination every month, but will consult the manufacturer before deciding if it should be done more regularly. He has taken advice from government officials and will broadcast announcements in five MTR stations - Tung Chung, Kowloon Tong, Hong Kong, Lai King and Lam Cheong - if the cable service needs to be suspended. Notices will be placed in the entrances of 80 MTR stations and live broadcast announcements will be made in Ngong Ping instead of pre-recorded announcements. Shao stressed a team already contacts travel agencies and tells them not to take visitors to the terminals if there is a shutdown. He did not answer directly questions on whether the spate of incidents will tarnish Hong Kong's tourism image and said it is too early to say whether there should be changes in management. The Travel Industry Council estimates about 4,000 people from package tours will be hit by the 10-day suspension - up to 40 tours take the cable car each day. Many tourists - particularly from the mainland, Taiwan and Malaysia - went to the cable car terminal yesterday as they did not know about the suspension.

 China*:  Jan 29 2012 Share

Yum! Brands, the world's biggest operator of fast food restaurants, will complete its takeover and privatisation of Little Sheep Group next week after getting the go-ahead to withdraw the Chinese hotpot chain's shares from Hong Kong's main board. In a joint announcement yesterday, Little Sheep, Yum! Brands and its wholly owned subsidiary Wandle Investments said the Hong Kong stock exchange had approved the withdrawal of listing with effect from 4pm on February 2. United States-based Yum! Brands, owner of the popular KFC and Pizza Hut fast food chains, said its HK$4.4 billion buyout deal was sanctioned last Friday by the Grand Court of the Cayman Islands, where Little Sheep is incorporated. That followed the privatisation scheme's approval by independent shareholders of Little Sheep at an extraordinary general meeting held on January 6. The company, founded in Inner Mongolia in 1999, went public in Hong Kong in 2008. Yum! Brands, through Wandle Investments, is offering HK$6.50 per share in a deal that values Little Sheep at HK$6.7 billion. This will raise its stake in the mainland's leading hotpot chain to 93.2 per cent from 27.2 per cent. The acquisition is expected to expand Little Sheep's business and further develop the mainland operations of Yum! Brands. The US firm has more than 36,000 restaurants in more than 110 countries and territories. "We have a strong commitment to the China market and to the Little Sheep brand," Yum! China chairman and chief executive Samuel Su Jing-shyh said earlier this month. "We are confident we can further strengthen Little Sheep's brand, business model and market position." Yum! Brands is already the leading fast food chain operator on the mainland, with nearly 4,200 restaurants in more than 700 cities. KFC, which was the first fast food chain to enter the China market, in 1987, has almost 3,500 restaurants across the mainland. It also runs more than 560 Pizza Hut outlets and 20-plus East Dawning restaurants on the mainland. East Dawning represents the US company's attempt to serve selected Chinese cuisine, such as dumplings, in a fast food format similar to the KFC business model. Little Sheep, which had 192 directly owned and 277 franchised restaurants as of June last year, is famous for its Mongolian-style mutton dishes. Founders Zhang Gang and Chen Hongkai will remain minority shareholders after the privatisation is completed.

Obama forms new trade body to muscle China - US president vows action on 'unfair' Beijing policies, but mainland analysts see it as election rhetoric - US President Barack Obama says he will step up pressure on China and other countries that America accuses of unfairly subsidising exports to the world's No1 economy. In his state-of-the-union address, Obama announced a push to shore up American manufacturing and create jobs, and said he would establish a new government body dedicated to fighting errant countries. Obama mentioned China four times in his address on Tuesday night, which sounded like part of his re-election campaign as he pledged to revive the US economy by creating more jobs and finding more opportunities for American companies. "Tonight, I'm announcing the creation of a Trade Enforcement Unit that will be charged with investigating unfair trade practices in countries like China," he told Congress. "I will go anywhere in the world to open new markets for American products and I will not stand by when our competitors don't play by the rules. We've brought trade cases against China at nearly twice the rate as the last administration - and it's made a difference. "It's not right when another country lets our movies, music and software be pirated. It's not fair when foreign manufacturers have a leg-up on ours only because they're heavily subsidised," Obama said. Neither the Chinese government nor state-run media reacted to Obama's charges, with the mainland still in the middle of the week-long Lunar New Year holiday. One mainland expert agreed that the anti-China rhetoric was linked to Obama's re-election bid, and warned of touchier Sino-US ties, with trade disputes on the rise amid a bleak outlook for the global economy. "The recent escalation of rhetoric is putting pressure on US politicians, and particularly the president, to stand up to China during an economic downturn and a politically sensitive election year," said Professor Shi Yinhong , director of Renmin University's Centre of American Studies. With Europe mired in a debt crisis, the Obama administration saw fast-growing China as a key market to help the US double exports and bring down its high unemployment rate, Shi said. China has also been a point of contention for Republican presidential candidates, who in their debates have been airing fears over the nation's rising clout. The Republican challengers have criticised Obama for weak handling of China. Former Massachusetts governor Mitt Romney has promised a tougher stance, saying he would start by labelling China a currency manipulator. Shi is sceptical about the presidential candidates' strong words against China. "Talk of getting tough on China has long been a feature of US campaigns," Shi said. "Yet actual US policy towards China has remained remarkably consistent, regardless of the political party in charge." Shi noted that Obama's speech was delivered when he was running for a second term and Congress was dominated by his opponents. However, Professor Tao Wenzhao , a researcher at the Institute of American Studies of the Chinese Academy of Social Sciences, said the Obama administration would get tougher, further stoking bilateral tensions this year. "We can see the escalating rhetoric over China this year, compared with [2008 and 2004]," Tao said, referring to previous US presidential election years. "From Obama's speech, I can foresee more trade disputes and escalating rivalry in every realm in the year ahead, from trade and currency to regional security and global diplomacy."

Shanghai-born conductor Yu Long was attacked on a New York street this week, just a day before his Lunar New Year concert with the New York Philharmonic. The attacker punched Yu in the eye and ran off, though not before the 48-year-old landed a few blows of his own. Yu said on Wednesday that he was walking with a friend on Columbus Avenue after dinner at around 10.30pm on Monday, when a man approached and asked for a cigarette. Yu said he did not want to be bothered and waved him off, but the man suddenly swung a fist and struck him in the eye. When the man started to run off, Yu said, he chased him, grabbed him and swung back at him. "It's a true West Side Story", Yu said, referring to the musical about rival gangs that was set in the neighbourhood. The man eventually fled. Yu said he did not call the police because the episode was "not a big deal". He said he went to an emergency room in the middle of the night after discomfort in his eye grew. A doctor said there was a scratch on the surface of his eye, which later became bruised. Yu went on to conduct the concert on Tuesday night, his face swollen. "A professional is a professional," he said. Yu's Lunar New Year gala at the Avery Fisher Hall, in the Lincoln Centre, on Tuesday night featured traditional and modern Chinese music, including Chen Qigang's Extase for Oboe and Orchestra, Zhou Chenglong's Raise the Red Lantern and a traditional Mongolian folk song suite performed by a Mongolian children's choir. The concert programme also included Liszt's Piano Concerto No1, which was performed by Chinese pianist Lang Lang. "Having international orchestras perform Chinese compositions and bringing Chinese music in to mainstream Western culture has been my mission in recent years," Yu was quoted as saying by the Beijing Youth Daily newspaper last week. Yu is artistic director and chief conductor of the China Philharmonic Orchestra, which he co-founded in 2000. He is also music director of the Shanghai and Guangzhou symphony orchestras as well as artistic director of the Beijing Music Festival. Born in 1964 into a family of musicians in Shanghai, Yu received his early musical education from his composer grandfather, Ding Shande. He studied at the Shanghai Conservatory and the Hochschule der Kunst, or University of the Arts, in Berlin.

Traditional ceremonies are getting popular among Chinese newly weds when more couples are expected to tie the knot in the Year of the Dragon. Dressed in ancient official robes and wearing chaplets, the groom and bride exchanged jade pendants as symbols of their marriage instead of rings in a silk-curtained lounge. The sophisticated formalities went smoothly to the sounds of a zither. The only nod in the direction of the modern age was an LED screen. In China, the phrase "old is gold" is best exemplified by the growing popularity of vintage weddings. Wedding planning companies are delving into the rich legacy of the past to revive typical Han or Tang weddings with the aid of modern techniques. "Vintage Chinese weddings are not only a trigger to revive our own traditional customs but also a trendy form for the big ceremony because Chinese people are getting tired of common Western-style weddings," said Shi Yu, deputy director-general of the Committee of Wedding Service Industries. As 2012 is the Year of the Dragon in the Chinese zodiac and there are two Beginnings of Spring according to the Chinese lunar terms, it is believed to be a very auspicious year for marriage. In recent years, due to demographic changes, more couples have been marrying. The latest data from the Ministry of Civil Affairs showed 12.41 million couples got married in 2010, 30 percent higher than 2006 and 2 percent higher than 2009.

A farmer in Zouping county in East China's Shandong province picks organic tomatoes. Organic food products have become popular New Year gifts as the Chinese are paying more attention to health and food safety. On Friday in a Wumart supermarket in Beijing's Chaoyang district, Han Yuying, a 53-year-old worker at a nursing home, was trying to select a box full of eggs that, according to the label, were laid mostly by chickens that had dined on natural feed containing no additives. "I want to send some eggs to my sisters as a Spring Festival gift," Han said. "These boxed eggs are indicative of quality." The 60-egged box Han bought cost 55.8 yuan ($8.80). That's a higher price than is found at farmers markets, where an egg can often be had for 0.7 yuan. In a booth at an Ito Yokado supermarket also in the Chaoyang district, a box containing 4 kilograms of organic pork was going for 1,288 yuan. A salesman said the box was put on sale for the Spring Festival and that it has proved popular among customers. "A man just ordered three boxes," he said. Zhang Qiang, manager of Lianshan Black Pigs Farm in Wulian county, Shandong province, which has more than 500 pigs raised on natural foods, said the demand for organic pork rapidly increases around the time of Spring Festival. That recurring trend has caused the company's supply of products to run short this year. "Organic pork has been chosen as a Spring Festival gift for many large companies, State-owned institutes and some government organizations," Zhang said. "Most of the pork is sold to big cities such as Qingdao and Jinan (both in Shandong)." Ordinary pork goes for about 25 yuan a kg, while the organic pork at his farm sells for closer to 100 yuan a kg, Zhang said. Besides organic pork, organic vegetables have become one of the most popular Spring Festival gifts. Jin Weiran, general manager of Rizhao Yuli Vegetable Co, which has produced and traded organic vegetables for more than three years, said sales of organic vegetable have picked up in recent weeks. "People are paying more attention to the safety of food nowadays, especially in 2011, when a great number of scandals about substandard food were exposed by the news media," he said. Jin said the company's organic vegetables are mainly transported to Hong Kong and sold to supermarkets there. But at Spring Festival time, more of his customers tend to come from the mainland. "More people buy a package of organic vegetables, which costs about 200 yuan, for their friends as the Spring Festival gifts," he said. "And the demand has surpassed our capacity for production. Healthy foods are more welcome than traditional gifts such as wines and cigarettes." The prices of organic vegetables are usually three to four times greater than those of ordinary vegetables, Jin said. "The price of organic pumpkins is about 18 yuan a kilogram, and regular pumpkins cost only 6 yuan a kilogram," he said. "Even though the prices are far more expensive, organic vegetables usually sell out in a short time." Fan Zhihong, an assistant professor at China Agricultural University's college of food science and nutritional engineering, said she believes the increasing popularity of organic food during Spring Festival shows that people want to eat healthier. "Giving organic food - a box containing different kinds of cereals, for instance - may also serve as a reminder of the importance of having a healthy diet," Fan said. "But when it comes to nutrition, there is no evidence to suggest that organic food is more nutritional than ordinary food. ... Giving these sorts of presents is more of a way of showing your tastes and expressing your respect toward the recipient."

Hong Kong*:  Jan 28 2012 Share

Passenger numbers at Hong Kong International Airport grew faster last year than at its smaller neighbour, Shenzhen airport. But aviation experts are divided as to whether that's a trend that's likely to continue. The Airport Authority said the number of passengers at Chek Lap Kok rose 5.9 per cent last year to a record 53.9 million, while cargo volume dropped 4.6 per cent to 3.9 million tonnes. By comparison, Shenzhen saw a 5.7 per cent rise in passengers, to 28.2 million, and a 2.4 per cent increase in cargo volumes to 828,400 tons. Thirteen airlines began operations at Chek Lap Kok last year, including Indonesia AirAsia, Air Busan and MIAT Mongolian Airlines. Total aircraft movements rose 8.9 per cent to 333,760 take-offs and landings, while Shenzhen saw a 3.4 per cent rise, to 224,300 movements. Airport Authority chief executive Stanley Hui Hon-chung said: "Looking ahead, passenger volume and aircraft movements will likely continue their growth trend, though at a slower pace. Cargo tonnage may decline further due to the slowdown in global trade but the pace of decline will likely be less than what we have seen in 2011. Notwithstanding worldwide economic uncertainty in the near term, we are confident about the medium and long-term growth prospects of HKIA." Commenting on the figures, Brendan Scobie, from the Singapore office of the Centre for Asia Pacific Aviation, said it was "interesting there was faster growth at Hong Kong than Shenzhen". But he also pointed out that growth at Shenzhen airport may have been constrained last year because it had only one runway until mid-2011, when a second one opened. "The second runway which opened at Shenzhen last year is allowing Shenzhen Airlines and other carriers to accelerate their growth," he said. "With that bottleneck removed - they were at capacity with the single runway - I wouldn't be surprised if Shenzhen growth takes off and is higher than the annual growth at HKIA these next few years." Scobie added: "Shenzhen is primarily a domestic China airport - 96 per cent of capacity at Shenzhen is domestic. So its growth relies heavily on how fast the domestic market in mainland China is growing. While Hong Kong has a fair amount of mainland China traffic, it's more of an international airport and also has a big transit business. Shenzhen airport's growth also relies somewhat on how fast Shenzhen Airlines is growing, as the carrier accounts for 32 per cent of capacity at Shenzhen." Martin Craigs, chief executive of the Pacific Asia Travel Association, thought Hong Kong grew faster in passenger terms because of its "sheer convenience and connectivity", with more international destinations for transfer passengers, especially those from the mainland and north Asia. "An airport does not have to be the cheapest to attract more customers - it's the quality of service." The growth in passenger numbers at Hong Kong and Shenzhen compared with figures from the Civil Aviation Administration of China, which showed overall passenger numbers at mainland airports climbed 9.2 per cent to 292.2 million.

Hong Kong International Airport (HKIA), the world’s busiest air cargo hub, said air cargo traffic last year fell 4.6 per cent as deepening global economic uncertainty in Europe and the United States hurt demand for exports from Asia, particularly China. The outlook for air cargo, an important indicator of trade and economic momentum, is uncertain as consumer sentiment in Hong Kong’s two major export markets, North America and Europe, remains fragile. “Cargo tonnage may decline further due to the slowdown in global trade but the pace of decline will likely be less than what we have seen last year,” said Airport Authority Hong Kong Chief Executive Stanley Hui Hon-chun in a statement on Wednesday. Air cargo volume in December fell 4.3 per cent, slightly better than the 6.6 per cent drop seen in November, pushing full-year traffic down to 3.94 million tons. Hong Kong’s exports rose a modest 2 per cent year on year in November, slowing from 11.5 per cent growth in October and reflecting the impact of cooling global economic conditions. The euro zone economy grew just 0.2 per cent in the third quarter of last year and is widely expected to have contracted in the final three months of the year. In the United States, improving labour market conditions lifted consumer confidence to an eight-month high in December, but persistently weak house prices remain an obstacle to faster economic growth. Analysts and Hong Kong government officials have said the outlook for the city’s economy and exports does not look promising. On a brighter note, Hong Kong passenger traffic for last year rose 5.9 per cent to a record 53.9 million, propelled by an increase in visits to and from mainland China and Southeast Asia. Cathay Pacific Airways (SEHK: 0293) Ltd, the world’s largest air cargo carrier, said this month that its December freight volume fell about 12 per cent, ending last year on a disappointing note, and it saw no sign of improvement in the near term.

A HK$70 million green park has been created out of barren rocks in a former quarry in East Kowloon. It will lower temperatures by up to five degrees Celsius in summer. The community park, adjoining three new public housing estates called Choi Fook, Choi Ying and Choi Tak, was difficult to build because of the quarry's landscape, said Ada Fung Yin-suen, deputy director of housing. "The site is elongated, with narrow strips of land and a huge, barren piece of granite bedrock without a soil layer. It was very difficult to grow plants, and to plan the open space and building locations," Fung said. There were challenges because it was the first time the Housing Department turned a quarry into a public park, she said. The 1.36 hectare park on Choi Hei Road serves the 35,000 people who moved into the three housing estates between 2008 and last year. The quarry near Choi Hung MTR station closed in the 1970s and public housing was proposed for the site in 2002. To overcome the hurdle to growing plants, officials had first to remove almost a metre of the top rock layer and then fill it in with soil. About 90 mature trees were saved from the Kwun Tong swimming pool, which is being redeveloped, and were transplanted to the quarry park, providing shade along a 660 metre path. A 4,000 square metre open space has become a lawn, but trees cannot be grown in this area because of the underground drainage network sited there. "The extensive greening is important because without it, the place would be four to five degrees hotter in summer," Fung said. Planters had even been placed inside the public toilets. About 100 cut-scarred granite rocks, which are the only signs that the park was once a quarry, have been placed around the park, with signs providing geological information. Rocks showing natural weathering and erosion are also on display. Fung said guided tours would be organised to help people understand the history of the quarry and the geological features of the area. The park has a series of meandering footpaths to overcome the steep gradients between the platforms created for the former quarry, and to link up recreational facilities, including a tai chi area, observation deck and foot-massage paths.

Lantau's cable car has ceased operations for 10 days after the system was struck by another technical fault yesterday, the fourth in two months, which left hundreds of passengers stranded in mid-air. The operator of the 5.7-kilometre cable-car route from Tung Chung to Ngong Ping on Lantau confirmed that 700 holidaymakers were affected by the latest incident. A thorough inspection of the system, followed by a trial run, had to take place before service could resume, the company's managing director Wilson Shao said last night. He apologised to those affected, adding that they would all get a full refund. An automatic alarm was triggered at 2.49pm yesterday due to a wheel "that was not running smoothly", Ngong Ping 360, a subsidiary of the MTR Corporation (SEHK: 0066), said. Holidaymakers were stuck in cable-car gondolas for up to 90 minutes, with the air temperature at the time 3 degrees Celsius. "It was like we were sitting in a fridge, not knowing what was going on," a mainland traveller said. "All we could see was fog and rain. Our holiday has been spoiled now, and the day has been wasted. We are very upset about the service." Passengers said there had been an announcement through a speaker in the gondola saying service had been suspended, but not why. They were unable to communicate with staff. Ambulances were waiting at the Ngong Ping station after four passengers dialled 999, saying they felt unwell, but no one went to hospital. More than 1,000 holidaymakers at the Tung Chung station queued for a shuttle bus, and a ticket refund was arranged. The last suspension was on December 22, when 400 passengers were stuck for 13 minutes.

Hong Kong’s exports grew 7.4 per cent in December year-on-year to HK$271.8 billion, according to government figures released on Thursday. Within this total, re-exports increased by 8.3 per cent to HK$267.1 billion last month compared with the same month in 2010, the Census and Statistics Department said. However, domestic exports decreased by 26.5 per cent to HK$4.7 billion over a year earlier, the department said. Imports rose 8.1 per cent over a year earlier to HK$320.7 billion in December. This followed a year-on-year increase of 8.8 per cent in November. A visible trade deficit of HK$48.9 billion – equivalent to 15.3 per cent of imports – was recorded in December, the department said. For 2011 as a whole, the value of total exports rose by 10.1 per cent over 2010. Within this total, re-exports grew by 10.5 per cent but domestic exports fell by 5.5 per cent. Imports increased by 11.9 per cent. A visible trade deficit of HK$427.3 billion, equivalent to 11.4 per cent of the value of imports, was recorded last year. A government spokesman noted that December’s growth was mainly led by better-than-expected performance of the mainland market. But the spokesman said the United States and European Union markets remained sluggish, and exports to many other Asian markets also slowed. “Looking ahead, the lingering euro zone sovereign debt crisis and expected slack in the advanced economies will remain the key downside risks to Hong Kong’s export performance. We need to stay vigilant to these external developments,” he said.

 China*:  Jan 28 2012 Share

McDonald's plans to accelerate restaurant openings on the mainland by adding up to 250 new outlets this year, driven by increased demand for hamburgers and other fast-food fare in the country. The expansion programme would mark a new high in the number of McDonald's store openings in a year on the mainland, which is behind Japan in terms of having the largest network of restaurants established by the Illinois-based company in the Asia-Pacific region. "In 2012, we will continue to expand services like delivery in Asia and increase our extended hours across the region," McDonald's chief executive officer James Skinner told analysts. Skinner said the company, which yesterday reported global revenue of US$27 billion last year, was "extremely excited by our progress and potential" on the mainland, "where we opened a record 200 restaurants in 2011". He said the mainland, Japan and Australia were McDonald's three biggest markets in the Asia-Pacific region. McDonald's goal this year is to establish between 225 and 250 new restaurants on the mainland, raising the total number of its stores in the domestic market to between 1,689 and 1,714. It had 1,464 stores on the mainland at the end of last year, compared with 3,298 in Japan. Peter Bensen, the chief financial officer at McDonald's, said the company expected to spend about half of its US$2.9 billion in budgeted capital expenditure this year to open more than 1,300 new restaurants worldwide. The other half of that budget would be invested in the company's existing locations, including rebuilding at least 2,400 restaurants, he said. While McDonald's remains the world's largest operator of hamburger fast-food restaurants, its expansion efforts on the mainland pale in comparison to those of Yum Brands. Kentucky-based Yum is the leading fast-food restaurant chain on the mainland, where it has about 4,200 stores in more than 700 cities. Its brands include KFC, Pizza Hut and hotpot chain Little Sheep Group. After a decade of strong revenue growth, the mainland's fast-food industry shows no signs of weakening. Market research publisher IbisWorld forecast the industry would generate sales of US$147 billion by 2016, up from an estimated US$74.8 billion last year. There were nearly 2 million establishments operating in the industry last year, including franchise and chain operators of all sizes and independent Chinese-style fast-food facilities, according to IBISWorld.

Apple underestimated the staggering demand for the iPhone 4S when it started sales in China this month, chief executive officer Tim Cook said. "We thought we were betting bold," Cook said about sales of the device in China on a conference call. "We didn't bet high enough." Crowds pelted Apple's oldest store in China with eggs on January 13 when the shop in Beijing's Sanlitun district failed to open on the first day of sales for the iPhone 4S. After police sealed off the area to remove more than 500 people, Apple announced it would suspend sales of iPhones at all stores in Beijing and Shanghai "for the time being" to ensure safety. Cook was speaking after Apple reported a net profit for the third quarter of US$13.06 billion - more than U$1 billion a week, or US$13.87 a share - handily outstripping an average Street forecast of US$10.16 per share. The amount by which Apple beat the forecast - by more than US$3 a share, or US$3.5 billion - would be a respectable sales figure for many smaller technology companies. With sales halted at its Chinese retail outlets, Apple is now offering the iPhone in the world's largest mobile phone market through its online store, carrier partner China Unicom (SEHK: 0762), and authorised resellers. The company's online store in China is sold out of the iPhone 4S. Chinese demand for the handset is "off the charts", Cook said. Apple this month moved closer to expanding its distribution in China through a second carrier partner when regulators approved specifications for a device that would run on the network of China Telecom (SEHK: 0728), the nation's third-largest wireless carrier. "China Unicom continues to be a very key partner," Cook said. "China is an extremely important market for us and we continue to look at how to grow it further." Apple's quarterly results blew past Wall Street's expectations after US consumers snapped up near-unprecedented numbers of iPhones and iPads, sending its shares up 8 per cent into record territory. The world's most valuable technology corporation returned to form after a rare miss in the previous quarter, assuaging investors' worries that its sheer size meant it was headed into a period of slower growth. It sold 37.04 million iPhones - its flagship product - and 15.43 million iPad tablets, doubling from a year earlier and easily outpacing already heightened expectations for a strong holiday season. That helped swell its war chest of cash and securities to almost US$100 billion - more than enough to plug December's United States budget deficit. The company founded by late Silicon Valley titan Steve Jobs - who died in October after a long battle with cancer - smashed estimates on all its results including gross margin, which came in at 44.7 per cent during the quarter. "I expect strength of iPhone, iPod Touch and iPad should carry on into the year," said Hendi Susanto at Gabelli & Co. "Apple still has some tailwind, including opening up new retail stores and expanding its distribution channels." Shares in Apple jumped 8 per cent to about US$452 in extended trade.

Warren Buffett plays the ukulele for CCTV's Spring Festival Gala on Sunday. American investor and philanthropist Warren Buffett made an appearance in the online version of the China Central Television (CCTV) Spring Festival Gala on Sunday. That followed performances by American singer Michael Bolton, Israeli psychic Uri Geller and Canadian singer Avril Lavigne in New Year's Eve concerts. It's part of a trend that is increasingly hard to ignore, with overseas singers, magicians and celebrities having performed in New Year's Eve concerts on 16 mainland cable television stations on December 31. Provincial cable TV stations have been splashing out money in the past two years to invite foreign stars to appear on their own Lunar New Year and Spring Festival shows, competing not only for profits but also to raise their brand awareness - a route to longer-term financial gain. The acts from Hong Kong and Macau who have performed in the past few years are increasingly being joined by stars from Japan, South Korea and the West. Lavigne sang four songs - including Girlfriend, the theme song for popular match-making show You Are the One - on Jiangsu Cable Television on New Year's Eve. She was joined by French singer Jean Roch, who sang two songs - including Can You Feel It, another theme song for a match-making show - and Geller. CCTV's New Year's Eve concert featured Bolton singing his cover version of Percy Sledge's '60s hit When a Man Loves a Woman, and American singer Bertie Higgins. Japanese actor and singer Yamashita Tomohisa performed on Shanghai Oriental TV, as did American singer Richard Marx, who performed his 1999 hit Right Here Waiting for You - still a staple of the mainland karaoke scene. Shenzhen TV invited Japanese actress Ryoko Nakano to sing. State Administration of Radio, Film and Television regulations meant that all their live performances were broadcast with a delay of at least 20 seconds. Mainland audiences have been increasingly exposed to foreign cultural products since the entertainment industry was opened up, especially after China's accession to the World Trade Organisation in 2001. Liu Yuan , director of Hunan Cable TV's branding department, said cultural co-operation between the mainland and overseas cultural organisations was on the rise. "More overseas performers have set their sights on the mainland market and it's natural to see foreign faces in the New Year concerts," she said. Her station invited British electronic string quartet Escala to perform on its Spring Festival gala. Competition among TV stations has pushed up the prices demanded by overseas stars, with the Beijing Youth Daily reporting that the 16 cable stations had spent a total of 500 million yuan (HK$615.11 million) on New Year concerts. But Liu said that was a grossly inflated estimate. "It's impossible that each television station could spend an average of 30 million yuan on one concert," she said. Professor Guo Zhenzhi , from Tsinghua University's school of journalism and communications, said China was awash with "stupid money" that could be spent without much consideration of economic benefits. "It's a sort of competition of expenses, with a mindset having formed that incredible investment will bring incredible results in a highly competitive environment," she said. But Professor Xie Luncan , deputy dean of the Communications University of China's Cultural Development Institute, said the price paid to attract foreign stars was probably less than people thought because they could be compensated in other ways for performing on top entertainment stations such as Hunan TV. "Foreign stars come to China either for fame or profit," he said. "They need a platform to show their talent." Fan Yu , a director of Shandong TV's branding department, said that apart from profits from advertisements, linked to viewer ratings, stations also tried to raise their brand awareness. "For cable TV stations, the New Year concerts are just like the 100-metre dash at the Olympic Games," Fan said. "The winner doesn't necessarily mean that country is the best at all sports, but it's definitely the most eye-catching event." Liu said stations chose important occasions, including New Year and the Spring Festival, to stage shows to increase their influence. But Guo said she believed that it was not a phenomenon that would last very long - maybe one or two years - because there was a natural transition from fevered to rational investment. "It will eventually cool down because the influence of stars will wear out," she said. "More rational audiences will influence these TV stations, especially when some small and medium-sized stations might make a loss."

Taiwanese President Ma Ying-jeou said this month's presidential vote was the island's "best gift" to the mainland, and hailed their potential to show the path to democracy across the Taiwan Strait. Ma has said hundreds of millions of mainlanders watched Taiwan's presidential candidates debate live on television last month for the first time through the internet. The poll, which saw Ma re-elected, could inspire mainland democracy supporters, he said in a statement released by the Presidential Office. "The peaceful election, a sign of democracy taking roots and bearing fruit on the soil of a Chinese community, will make them feel that this will also happen on the mainland," the statement said. "I believe this is the best gift from us to the mainland." He added that the January 14 vote would demonstrate to the mainland that "headcount is the best way to solve differences between the two sides".

German Chancellor Angela Merkel will pay an official visit to China from Feb. 2 to 3, Foreign Ministry spokesman Hong Lei said Thursday. The visit is at the invitation of Premier Wen Jiabao, said Hong. During Merkel's visit, Chinese and German leaders will exchange views on bilateral ties and how to enhance the strategic cooperation between China and Germany, Liu Weimin, another spokesman, said at a regular news briefing last Friday. They will also talk about the world economic situation and Europe's economic and financial situation, said Liu.

The Flowers of War, a Chinese historical drama directed by Zhang Yimou starring Hollywood star Christian Bale, opened in 13 US cities, including New York and Los Angeles, on Jan 20. Though the film isn't expected to be the box office hit it has been in China, critics have applauded the film's effort in bringing the Rape of Nanjing to American audiences unfamiliar with it. The film is based on Chinese-American writer Yan Geling's novel 13 Flowers of Nanjing and depicts the Nanjing massacre in 1937 when Japan invaded China. Zhang, a fifth-generation Chinese filmmaker, is known in the US for action films such as Hero (2002) and Curse of the Golden Flower (2006). Flowers was released in China in mid-December and was a box-office hit. According to statistics released by the State Administration of Radio, TV and Film, the film was the highest grossing movie in 2011, taking in about 540 million yuan ($85 million) as of Jan 17. US distributor Wrekin Hill Entertainment told the Wall Street Journal that they hope the film will connect as well with Western audiences as it has in the East. In its Academy-qualifying one-week run in the US in December, Flowers grossed about $90,000. The film was China's Oscar nominee for best foreign language film but was not shortlisted. However, it will compete in the Asian Film Awards in March in Singapore, where it has been nominated for six awards, including best film and best director. Another Chinese film competing in the award contest is Flying Swords and Dragon Gate, which will open in the US as the first 3D Chinese kungfu movie later this year. A review of the movie in the New York Observer's says it serves as a needed education to those who know little about this part of the history. "Now the great Chinese director Zhang Yimou has made a valiant and compassionate effort to enlighten the ignorant. The Flowers of War is his best film since Raise the Red Lantern. It is emotionally shattering," the Observer said in the review. Bob Birchard, a feature film editor at the American Film Institute, said from an American perspective, it is worth seeing a film telling a part of the history that Americans are not familiar with. "Well you can ask that same question about any historical film - why to make it when it is already done and over - but you make films or write books based on the elements of history that can reflect on the current time," Birchard said. But different viewers have different options. The Washington Post's review gives Flowers two starts out of four, saying it "has a little bit of everything: action and romance, suspense and intrigue" but is missing "restraint". "Melodrama is often a key ingredient in wartime drama, but the sobering, unthinkable events that occurred during the Rape of Nanking (now called Nanjing) after the 1937 Japanese invasion of the Chinese Nationalist capital don't need to be dressed up and paraded out; they speak powerfully on their own stark terms," says the Post's review. According to the Los Angeles Times, the top five foreign language films released in the US only brought in around $40 million combined while American films collectively made billions internationally over the last four years. Chinese films in the US generally struggle to compete with Hollywood ones. But Birchard said Zhang and Bale may have enough star power to attract US moviegoers.

Hong Kong*:  Jan 27 2012 Share

International Monetary Fund's Deputy Director of the Research Department, Chris Walker (left); Financial Counsellor and Director of the Monetary and Capital Markets Department, José Viñals (center) and Economic Counsellor and Director of the Research Department, Olivier Blanchard (right) hold a joint press conference on the World Economic Outlook at the IMF Headquarters in Washington on Wednesday. The International Monetary Fund on Tuesday slashed its forecast for world economic growth, warning the weight of the euro zone crisis threatens to capsize the global recovery. The IMF cautioned that sharper budget cuts by major economies in the face of slower growth could exacerbate the slow down, and if European leaders fail to get on top of their debt crisis, global economic output could be cut by more than half. In an update of its September economic forecasts, the IMF cut this year projections to 3.3 per cent from 4.0 per cent, and said the 17-nation euro zone would contract by 0.5 per cent this year. It said global growth could pick up to 3.9 per cent next year, but only if market panic over euro zone fragility is avoided. The newest forecasts are “predicated on the assumption that in the euro area, policymakers intensify efforts to address the crisis,” the IMF said. If Europe’s leaders do not take strong action soon, nervous markets will press up the costs of borrowing for governments more widely, forcing them to cut spending. In that case, world output could be cut by another two percentage points, the global crisis lender said. “The global recovery is threatened by intensifying strains in the euro area and fragilities elsewhere,” the IMF said. “Financial conditions have deteriorated, growth prospects have dimmed, and downside risks have escalated.” The lowered forecast was tied directly to the euro area economy’s expected fall into “mild” recession this year on the back of government spending cuts and commercial banks reducing lending. “Growth in emerging and developing economies is also expected to slow because of the worsening external environment and a weakening of internal demand,” it added. The Fund has been warning for weeks that global growth was weakening due to the European crisis. On Monday in Berlin, IMF Managing Director Christine Lagarde pressed European leaders to build a stronger policy to prevent the problems in the continent’s weakest economies – Greece, Spain and Portugal – from pulling others down. “We need a larger firewall,” she said. “Without it, countries like Italy and Spain that are fundamentally able to repay their debts could be forced into a solvency crisis by abnormal financing costs.” The Fund warned against overly sharp budget-balancing by those countries that can afford to move slowly to reduce their deficits. Otherwise, they will just create more drag on the global economy. “Decreasing debt is a marathon, not a sprint,” said Olivier Blanchard, the IMF’s chief economist. “Going too fast will kill growth and further derail the recovery.” The recommendation was pointed at Europe’s largest economies Germany, France and Britain, all of which it said would continue to grow this year, albeit at a weak pace. Germany’s economy was seen growing 0.3 per cent, France’s 0.2 per cent, and Britain’s 0.6 per cent. The United States, the world’s largest economy, was projected to grow 1.8 per cent this year. The growth downgrades covered the entire world. Forecast growth in central and eastern Europe was slashed sharply to 4.5 per cent due mainly to fallout from the euro zone crisis. In China, the world’s second largest economy, the IMF saw a slower, soft-landing pace of 8.2 per cent this year and 8.8 per cent next year. But it warned of the risk of credit and real estate bubbles which, if the country undergoes a loss in overall confidence, could have a “very damaging” impact on economic activity. Among the other major emerging economies, India should grow at 7.0 per cent this year and pick up slightly next year; Brazil 3.0 per cent; Mexico 3.5 per cent; and Russia 3.3 per cent.

They claim to offer unrivalled convenience: but the inconvenient truth is that prices at your local 7-Eleven have crept up by almost a quarter in just three months, according to a new study. Prices have been bumped on everything from noodles to napkins and chocolates to condoms at the ubiquitous store chain, according to research by the Labour Party. The party said the price rises at 7-Eleven stores would be anything but convenient for Lunar New Year shoppers looking to pick up last-minute holiday gifts for friends and relatives, or left with no option as cheaper family-run stores close for the holiday. The party says prices at 7-Eleven's 964 outlets went up by an average of 22.8 per cent between October and December, while the year-on-year inflation rate for food was 11.5 per cent in December, according to the Census and Statistics Department. The store says its average price increase was just 2.8 per cent last year. Survey organisers said whisky, a festive treat, was 10 per cent more expensive in December than in October. The price of chicken concentrate rose by 46 per cent. Daily essentials also cost more. A bottle of Vitasoy milk cost HK$3.50 in October and HK$7 in December, a doubling of the price in two months, the survey found. The Labour Party's vice-chairman, Dr Fernando Cheung Chiu-hung, said a far more worrying trend was the vast price difference between 7-Eleven stores and Wellcome supermarkets, both of which are owned by Dairy Farm International. Shoppers could buy four bowls of noodles at Wellcome's 264 supermarkets for HK$21.90, but would only get one bowl for that price at 7-Eleven. Cheung accused Dairy Farm of making the most profit from people with limited mobility living in areas where supermarkets were scarce, such as Tung Chung. The party, created last year by left-leaning members of the pan-democratic camp, said the differences were about maximising profits for Dairy Farm and its owner, the Jardine Matheson conglomerate. "Dairy Farm controls pricing and limits residents' right to choose by way of its supermarkets and franchising rights and conditions," Cheung said, "so both residents and small shops are the victims under such conglomerate hegemony." Cheung said two thirds of 7-Eleven stores were run by franchisees, who had to follow the suggested retail prices put forward by Dairy Farm. Smaller stores are also coming under pressure because of price agreements between suppliers and supermarkets, Cheung said, quoting media reports from last year. Shops which sold their products at less than the agreed price found their supplies cut off. Cheung urged the Legislative Council not to consider supermarkets and convenience stores as separate industries when it passes the long-awaited competition law. 7-Eleven dismissed the party's concerns and said as many as 850 products were on promotion until January 31. "7-Eleven regularly provides discounts with a view to benefiting customers and promoting products," a spokesman said.

Japan announced its first annual trade deficit in more than 30 years on Wednesday, after the March quake-tsunami and strong yen hit exports in 2011, while high fuel costs pushed up import bills. The first calendar-year deficit in goods since 1980 came to 2.49 trillion yen (HK$249 billion), the finance ministry said. Imports were up 12 per cent by value on 2010, it said, particularly crude oil and liquefied natural gas (LNG), while exports fell 2.7 per cent, led by cars, semiconductors and other components. After rising from the ashes of the second world war, Japan established itself as a trading nation, enjoying enormous surpluses with its competitive cars, electronics and other exports. But the resource-poor nation’s energy imports have soared in the wake of the Fukushima nuclear crisis, after nuclear power stations were taken offline and fossil fuel plants were used to make up the difference. The earthquake and tsunami that triggered the disaster also disrupted manufacturing supply chains across Japan, while the euro zone debt crisis slowed the global economy and sent traders scurrying to the safety of the yen, driving up its value and reducing Japanese exporters’ income. In total, the cost of crude oil imports jumped 21.3 per cent, liquefied natural gas was up 37.5 per cent and petroleum products rose 39.5 per cent, while automobile exports fell 10.6 per cent, with electronic parts down 14.2 per cent. The trade deficit with China, Japan’s biggest trading partner, was more than five times that of 2010. The country recorded a trade surplus with the European Union, but it was down 31.3 per cent on 2010. Japan posted a deficit of 10.8 trillion yen with the Middle East alone, which provides almost all its oil, and a deficit of 3.1 trillion yen with Oceania, the source of large quantities of raw materials, especially Australia. Japan’s last calendar-year trade deficit came in 1980, when the nation was reeling from the second oil crisis and imports exceeded exports by 2.6 trillion yen – still a record. “It was the worst year for Japan’s trade since 1980. It was caused by slumps in exports and rises in imports due to the higher need for alternative energy,” said Satoshi Osanai, an economist at Daiwa Institute of Research. “Trade went in bad directions both ways,” he said, noting that export falls had been worse in the 2008 financial turmoil that followed Lehman Brothers’ collapse, when Japan recorded a trade deficit over the financial year. Japanese demand for oil and other fuel is unlikely to decrease in the near future and Osanai said resource prices remained high, “inflicting a big negative impact”. The strong yen, which hit repeated post-second world war highs against the dollar in 2011 and remains close to its peak, contributes to lowering import costs, but its negative effect on exports is larger. UBS economist Daiju Aoki warned that Japan was on course to record repeated trade deficits. “As the nation ages its production capability declines, hurting export power,” he said. “Japan will come to run trade deficits over the long term. It may return to figures in the black in 2012 or 2013, but the trend of suffering deficits could start.” Nonetheless, Chief Cabinet Secretary Osamu Fujimura, the top government spokesman, pointed out Japan’s balance of payments – which includes services and other transactions – was still in surplus. “There has been a structural change over the way our country earns through international trade,” he said, but he warned that Japanese manufacturing jobs were going overseas. “It’s important that we secure jobs in Japan,” he said.

Technical problems left passengers on the Lantau cable car hanging in mid-air for more than an hour on Wednesday afternoon. The Ngong Ping 360 cable car company said all the passengers were brought down safely. Some mainland passengers said they were stuck in the air for up to 90 minutes, and were told the technical glitch might have been caused by cold weather. Service was stopped for two hours, resuming at 4.15pm. The glitch is the fourth incident in the past two months in which passengers were stranded. Those incidents included a stoppage on December 18, when passengers were left hanging for six minutes, and service was stopped for two hours. On December 8, passengers were stranded for 16 minutes by a technical fault.

 China*:  Jan 27 2012 Share

With the last second of the Chinese lunar year of Rabbit being counted down on Sunday, joyous Chinese people erupted in cheers and glittering fireworks displayed against the night sky to greet the Chinese lunar year of Dragon. The Chinese dragon, opposite to its western counterpart, is perceived as an auspicious, powerful and dynamic icon, always courageous enough to face daunting challenges. China's efforts to strike balance between promoting growth and restructuring its export-driven economy along a path full of unexpected twists and pot-holes have best defined the spirits of the Chinese dragon. Despite facing stiff headwinds from a flagging world economy and a festering eurozone debt crisis, China still managed to reach a growth rate of 9.2 percent in 2011, dwarfing any other major economy in the world. More to the point, a breakdown of China's GDP growth reveals that the country is shifting away from its lopsided growth model toward a more balanced and sustainable one, with consumption contributing a larger share to China's GDP growth than previous years. The latest data released by China's National Bureau of Statistics showed that investment and consumption contributed 54.2 percent and 51.6 percent to China's GDP growth in 2011, while net exports registered a negative 5.8 percent. The better tone should also be fed into retail sales, a key indicator of consumer spending, which rose 18.1 percent year-on-year in December, up from the 17.3-percent growth seen in November. These figures have sent out a strong message that China's unfolding economic restructuring, aimed at reducing its over-reliance on exports to fuel the growth, has yielded some desirable results in 2011, the first year of China's 12th Five-Year Plan. Around the world, at the stroke of midnight, many might approach the Chinese lunar year of Dragon with more uneasiness than joy. Stock markets are in a funk. The eurozone is in danger of disintegration. Jobless rate is stubbornly high in the United States. Much of the rest world is struggling to avoid the collateral damage from sluggish economic growth in the developed world. Under such circumstances, the painful yet relatively smooth restructuring of the Chinese economy could prove to be good news not only to China, but also to the world. If the strong domestic demand can take hold for years to come, it will not only beef up China's abilities to defend the protracted global financial crisis, but also give a boost to the world economy. That's because a consumer-led China would be likelier to buy more of products and services from all corners of the world, which will support jobs and uplifting economies both at home and abroad. Meanwhile, a huge Chinese market, with its 1.3 billion people, means more exports and investment opportunities for other countries, thus helping them offsetting a dwindling demand from the West. China, with the spirits of the Chinese dragon, is ready to work with the rest of the world and show more courage to bid farewell to the beaten path so as to pull through the current economic downturn. 

Beijing will speed up construction of subway lines and regional branch road networks to ease traffic pressure, according to the municipality's government report released Thursday. The city's mayor Guo Jinlong read the report at the fifth session of the 13th Beijing Municipal People's Congress, saying the city will open another four subway lines and construct 45 km of branch roads to form regional road networks to ensure the traffic flow this year. Other measures will include developing rental bike facilities and improving bike road lanes. According to the report, under the regulation of monthly lottery for new car plates put into use last year, the number of the city's annual automobile increase fell by 617,000 units, and the sales volume of autos dropped 44.3 percent year-on-year in 2011. Three new subway lines opened at the end of last year, bringing the total length of the city's subway lines to 372 km, which also helped ease traffic pressure in the city.

Hong Kong*:  Jan 26 2012 Share

Hong Kong Airlines has ordered 10 Airbus A380s, like this one, as it seeks to boost capacity. It took delivery of a modified A330 on Saturday. Hong Kong Airlines is a step closer to launching its all-business-class service to London in March after it took delivery on Saturday of a specially configured Airbus A330-200 aircraft. The thrice-weekly London service is due to start on March 7. The new plane features 34 seats in a four-abreast arrangement that convert into lie-flat beds in Club Premium and 82 so-called cradle seats in a six-abreast configuration in Club Classic. That compares with around 253 seats in a traditional economy and business class layout. The airline is offering a special promotion from March to October that allows two people to fly together for HK$14,990 each or three people to fly for HK$13,300 each. The promotion includes the Hong Kong security charge, but not fuel surcharges or other taxes. That compares with an individual Club Classic fare of HK$16,640 plus taxes. The aircraft is also equipped with in-flight Wi-fi internet, so-called sky bars and an audio-video-on-demand entertainment system. Hong Kong Airlines will start its all-business-class service to Gatwick Airport about one month before Cathay Pacific Airways (SEHK: 0293) introduces its first premium economy cabin in aircraft flying the London route. The new aircraft arrived less than a week after the airline quietly halted its Hong Kong-Moscow flights due to low passenger volumes. The Moscow service stopped on January 16, about 18 months after it was launched. The airline made no formal announcement about the ending of the Moscow service, which was launched in competition with Cathay Pacific's service to the Russian capital. But Moscow could no longer be found as a destination on Hong Kong Airlines' website, neither could the press release announcing the Moscow service's June 2010 start. The Airport Authority website listed Monday's arrival from Moscow as cancelled. The carrier did not respond to requests for comment yesterday. Aviation insiders said ending the Moscow flights could be a temporary measure for the winter, and that the airline could possibly revive the service summer. The all-business A330 is one of 21 aircraft currently in the Hong Kong Airlines fleet. The carrier, which took delivery of a smaller Airbus A320 for mainland and Asian routes on Friday, has a further 54 Airbus aircraft on order. They include two more A330-200s, 15 A350-900s and 10 A380s.

Hongkongers should expect gossip galore in the Year of the Dragon and be careful to differentiate right from wrong - if the traditional Taoist fortune ceremony is any guide. Lau Wong-fat, chairman of the Heung Yee Kuk rural body, yesterday drew a fortune stick numbered 29, which is considered "average" rather than particularly lucky or unlucky, at Che Kung Temple in Tai Wa, Sha Tin. Its literal meaning is: "It might be difficult to differentiate a god from an evil ghost, but there will be little danger of the sky and earth not knowing how to make it out eventually." A fung shui master said the stick implied Hong Kong would encounter a lot of falsehood and gossip. Asked if the fortune referred to the chief executive election on March 25, Lau replied: "It seems so." "The public should recognise what is right and wrong, black and white," Lau said, but he would not be drawn on which candidate - Henry Tang Ying-yen, Leung Chun-ying or Albert Ho Chun-yan - would be a "god" and which the "evil ghost". Lau took on the task of drawing the stick in 2004, a year after the home affairs chief at the time, Dr Patrick Ho Chi-ping, drew 83, the worst possible number. That year saw economic turmoil and the outbreak of severe acute respiratory syndrome. Last year Lau drew stick number 11, associated with an ancient poem implying a strategic predicament and the coming of a new leader. James Lee Shing-chak, one of the city's best-known fung shui masters, said this year's stick indicated there would be a lot of gossip and that people might struggle to tell fact from fiction, but offered no clue on who will succeed Donald Tsang Yam-kuen. Tang would not be drawn on the fortune-telling. "I don't know how to interpret the stick's meaning." He continued his campaign in Hung Hom, where he met a retired domestic helper who had served his family for five decades. The woman, known as "Sister Mei", said Tang was generous and kind. "He did not get mad with the maids even though he was a young master," she said. Leung, back from a short break with his family in Britain, said he preferred to talk about people's livelihoods than speculate on the interpretation of the fortune stick. Meanwhile, a group of young people protesting against rural leaders claiming to speak for Hong Kong also drew "average" fortune sticks.

 China*:  Jan 26 2012 Share

Huawei Technologies could soon evolve into a giant in information technology outsourcing services on the mainland through its investment in a new operating unit of ChinaSoft International, according to analysts. Shenzhen-based Huawei, the mainland's biggest telecommunications equipment manufacturer, earlier this month agreed to acquire a 40 per cent stake in an outsourcing joint venture being formed by Hong Kong-listed ChinaSoft. "Huawei may want to use the joint venture as a stepping stone to enter the information technology outsourcing business," a report from JP Morgan Securities (Asia-Pacific) said. The opportunity would be large for Huawei, as JP Morgan forecast the mainland market for IT services may be worth US$23.6 billion by 2015 from an estimated US$16.2 billion this year. Privately held Huawei is the world's No2 telecommunications equipment supplier behind Swedish rival Ericsson. It is a major client of three leading Beijing-based providers of IT outsourcing services. The mainland company accounted for 16.8 per cent, or US$41.4 million, of ChinaSoft's US$246.3 million revenue last year. At New York-listed VanceInfo Technologies, Huawei accounted for 25 per cent, or US$52.9 million, of US$211.5 million in sales last year. Huawei also made up 25 per cent, or US$49.3 million, of the US$197 million in revenue last year of New York-listed iSoftStone. JP Morgan said Huawei had been reviewing since the middle of last year its outsourcing strategy, with the aim to streamline its exposure to key providers. Long term, Huawei may end up being a large competitor to VanceInfo and iSoftStone, JP Morgan said. On January 12, Huawei agreed to invest 40 million yuan (HK$49.2 million) in Chinasoft International Technology Services, which will have a registered capital of 100 million yuan. Huawei will also receive better terms, such as preferential payment arrangements, from venture partner ChinaSoft. "We will provide support to the joint venture by sharing our best practices regarding management of quality, research and development, as well as human resources," Huawei senior vice-president Ding Yun said. He will serve on the board of the firm. Huawei plans to develop the venture into an expert in research and development and systems integration processes. Huawei has supplied telecommunications-related IT services to network operators, large corporations and public-sector agencies for years. ChinaSoft chairman and chief executive Chen Yuhong said the venture will restructure its outsourcing activities - including applications development, enterprise software implementation and maintenance - that are done through 15 subsidiaries.

Slowing global trade this year will force China's ports to scale back investment in container terminals, but investment in bulk-cargo terminals should continue, analysts say. Container throughput this year in Hong Kong, the world's third-busiest port, will match last year at best and could even shrink, said Sunny Ho Lap-kee, executive director of the Hong Kong Shippers' Council. "Southern China is suffering from a surge in labour costs and the impact of contracting demand in Europe and the US," Ho said. Guotai Junan analyst James Song forecast container throughput growth at mainland ports would be roughly 5 percentage points lower than last year's growth of nearly 12 per cent. The growth in annual cargo throughput of ports in China and the rest of Asia would be 3 per cent to 5 per cent for last year and this year, JP Morgan analyst Karen Li predicted. "Globally, it will be even lower," she added. Throughput growth at mainland ports was 11.6 per cent last year and 18.6 per cent in 2010. In 2009, amid the global financial crisis, the cargo throughput of mainland ports fell 5.9 per cent, Li said. "Port operators will focus on the bottom line this year. Some Chinese ports will delay some projects." For example, Shenzhen's Yantian port is building three container terminals to be completed in 2013, 2014 and 2015. Li expects the completion of the container terminal originally scheduled for 2015 to be delayed. No new container terminal projects had been approved recently in Shenzhen, said Luo Ping, transport planning director of the National Development and Reform Commission. "Ongoing container projects in Chinese ports may slow down due to the slowdown in global trade," Luo said. "Some new container projects in Chinese ports may not be approved." However, mainland ports would continue to build facilities for coal and iron ore, as iron-ore handling capacity was far from sufficient to meet demand, Luo said. This year, mainland ports would focus on upgrading bulk-cargo capacity, such as the recently announced plan to build a 300,000 deadweight tonne berth in Tianjin, said Charles de Trenck, a transport analyst at Transport Trackers, a Hong Kong shipping consultancy. There was excess container capacity in many mainland ports including Shanghai, de Trenck said. From 2002 to 2008, Chinese ports focused on expanding container capacity, said JP Morgan's Li. "China's commodity demand is volatile, but capacity lags behind because China focused on container ports in the past. In the past two years, the focus in China was spending on dry bulk cargo and this trend will continue." Li said the key driver for demand for dry-bulk-cargo capacity was the domestic economy, while the drivers of container demand were the US and Europe, whose economies were currently weak. Hutchison (SEHK: 0013) Port Holdings (HPH) and Modern Terminals, two Hong Kong port operators with operations in Hong Kong and Shenzhen, declined to say whether they would delay port projects. An HPH spokesman said: "Given our strong port diversification model, HPH will be in a reasonable position to respond to any change in cargo movements. We also remain alert to any possible new investments which might arise." Some smaller mainland ports such as Zhanjiang are investing in expanding capacity. The port, in southwestern Guangdong will build two bulk-cargo terminals, one container terminal and other facilities between now and 2014, the Zhanjiang Port Group says in a prospectus for a bond sale.

The annual output value of the mainland's satellite navigation industry is estimated to reach more than 225 billion yuan (HK$275 billion) in 2015, according to a research report. The report, by a think tank under the National Administration of Surveying, Mapping and Geoinformation, predicted that the industry would become the mainland's third new economic growth point in information technology, after mobile communications and the internet. More than 5,000 firms and organisations are involved in satellite navigation, and the industry generated more than 50 billion yuan of output value in 2010, according to the report, published by the Social Sciences Academic Press. The mainland aims to increase the number of satellite navigation terminals used by the public to 340 million by 2015.

Objects in the rearview mirror are often closer than they appear at first. But in the case of the Chinese juggernaut, rapid economic growth means they are actually shrinking at a rapid rate. In 2011, China's gross domestic product came in at 47.1 trillion yuan ($7.4 trillion). That represented nominal growth of 17.5% from 2010, a blistering pace that makes many of the problems of debt and credit that trouble investors and hang over valuations for Chinese stocks appear a little more manageable. Take local-government debt. The government's auditor put the number at 10.7 trillion yuan at the end of 2010. That was equal to 26% of China's GDP. In 2011, it shrank to 22%. Even if weaker demand and lower inflation mean a slightly lower nominal growth rate in 2012, by the end of the year local-government debt could shrink to 19% of GDP. Debt may be creeping up, but not enough to push the ratio in the wrong direction. Investors also worry about China's credit binge, which saw the ratio of loans to GDP soar from 96% at the end of 2008 to 119% at the end of 2010, as the pace of new loans ran far ahead of GDP growth. An expanding economy means that ratio was down to 116% in 2011. That reduction reflects the fact that banks' loan books are expanding, though not as fast as GDP. China's happy situation stands in stark contrast to those of neighbor Japan, crisis-ridden European countries and the U.S., where slow or even negative growth does little to alleviate the problem of ballooning debt. Economic growth hides a multitude of sins. The trouble for China's competitors is that achieving any significant increase in nominal growth without a large portion coming from higher inflation looks hard to do.

Hong Kong*:  Jan 25 2012 Share

The Hong Kong Exchange Fund turned in gains of HK$21.7 billion in the last three months of 2011, a turnaround from the HK$40.8 billion loss chalked up in the third quarter, as markets stabilized. All asset classes were battered earlier from the shock of US sovereign credit rating downgrade and Greece being on the brink of a credit default. Still, the fund's HK$26.7 billion gain for the whole year was the worst since 2008. The return translates to an average gain of HK$3,814 for the SAR's seven million residents. Return on investment was only 1.1 percent for the year in Hong Kong dollar terms, which Hong Kong Monetary Authority chief executive Norman Chan Tak-lam described as not satisfactory. That compares with a 3.6 percent gain in 2010 and 11.8 percent in 2007. Bu last year's gains were hard won amid volatility in global markets, he said. The Exchange Fund, which has assets of HK$2.49 trillion, will transfer HK$9.5 billion to government coffers. Its accumulated surplus hit HK$568 billion at the end of December, down from HK$592 billion a year ago. Gains from bonds in the fourth quarter hit HK$11.2 billion, matching foreign exchange losses as the euro depreciated against the dollar. Hong Kong and world equity bets were rewarded with gains of HK$5.5 billion and HK$15.8 billion, respectively. "Positive developments in Europe" in the fourth quarter, such as fiscal pacts and long-term refinancing operation launched by the European Central Bank, enabled the Exchange Fund "to recoup part of its losses of the third quarter." However, Chan is cautious on the investment outlook as Europe may slip into a mild recession, and the US recovery may be held back by a sluggish housing market and high jobless rate. "Capital flows will be unpredictable and markets will continue to be volatile," he said.

More European and US enterprises are expected to expand their operations or locate their offices to Hong Kong amid continuing economic and financial uncertainties in their backyard, Invest Hong Kong said. "Overseas-based investors will increase their presence in Asia Pacific because they are trying to offset tough economic times in their home countries," said Simon Galpin, director- general of investment promotion of InvestHK, a department under the Commerce and Economic Development Bureau. It attracts and facilitates foreign direct investment. Last year, the agency paved the way for a record 303 companies from 39 countries to start or expand business in Hong Kong. Of these, 56 were from the mainland, 48 from the US and 30 from the UK. The companies are mainly from the tourism and hospitality sector, followed by transport and industry, and innovation and technology. About a third of companies said they are attracted by the mainland and the Hong Kong Closer Economic Partnership Arrangement, or CEPA. These companies invested HK$5.06 billion, down 38 percent from last year's HK$8.13 billion. More than 2,700 jobs were created, according to InvestHK. Mainland companies will continue to lead among all countries this year. "More mainland firms will expand in the SAR this year because we can provide them with the right financial services talents to help their funding needs, listings, and promotions and to build up their international networking," said associate director Victoria Tang Chung- man. "The presence of these firms can be expanded further worldwide." But Galpin said if uncertainties were to persist, overseas companies could face difficulty in securing funding for expansion adversely impacting foreign direct investment into Asia. InvestHK is mulling expanding into Singapore and Brazil, and the investment promotion unit in Taipei.

The Hong Kong Exchange Fund turned in gains of HK$21.7 billion in the last three months of 2011, a turnaround from the HK$40.8 billion loss chalked up in the third quarter, as markets stabilized. All asset classes were battered earlier from the shock of US sovereign credit rating downgrade and Greece being on the brink of a credit default. Still, the fund's HK$26.7 billion gain for the whole year was the worst since 2008. The return translates to an average gain of HK$3,814 for the SAR's seven million residents. Return on investment was only 1.1 percent for the year in Hong Kong dollar terms, which Hong Kong Monetary Authority chief executive Norman Chan Tak-lam described as not satisfactory. That compares with a 3.6 percent gain in 2010 and 11.8 percent in 2007. Bu last year's gains were hard won amid volatility in global markets, he said. The Exchange Fund, which has assets of HK$2.49 trillion, will transfer HK$9.5 billion to government coffers. Its accumulated surplus hit HK$568 billion at the end of December, down from HK$592 billion a year ago. Gains from bonds in the fourth quarter hit HK$11.2 billion, matching foreign exchange losses as the euro depreciated against the dollar. Hong Kong and world equity bets were rewarded with gains of HK$5.5 billion and HK$15.8 billion, respectively. "Positive developments in Europe" in the fourth quarter, such as fiscal pacts and long-term refinancing operation launched by the European Central Bank, enabled the Exchange Fund "to recoup part of its losses of the third quarter." However, Chan is cautious on the investment outlook as Europe may slip into a mild recession, and the US recovery may be held back by a sluggish housing market and high jobless rate. "Capital flows will be unpredictable and markets will continue to be volatile," he said.

Hotels and restaurants providing good views of the 2012 Cathay Pacific International Chinese New Year Night Parade have reported high bookings. While the doors of most Chinese restaurants along the route will be closed on Monday to allow their staff to celebrate the first day of the Lunar New Year with their families, some will remain open to take advantage of the festive mood. The Peninsula Hotel has reported full bookings for its two Mediterranean restaurants, Chesa and the Verandah. Tang Court at the Langham Hotel noted high bookings on the first day as well. The hotel said reservations have been coming in swiftly at its other restaurant, L'Eclipse, with its traditional Chinese lunches and dinner buffets popular with foreigners. These dining locations provide front-seat views of the parade, which will be staged for the 17th year by the Hong Kong Tourism Board. Performers include a Chinese Shaolin kung-fu group, a comic band from Italy and a carnival group with big props and fantastic costumes from Britain. Meanwhile, vendors at Victoria Park's Lunar New Year Fair are having mixed feelings about their businesses this year. A garden manager said he has sold only 20 out of 300 peach blossom trees so far. Those selling design products, however, are reporting brisk sales. A stall selling lucky spring couplets, which can be folded into paper flutes, said turnover reached HK$14,000 yesterday. Meanwhile, a survey showed that most people are worried about the economic outlook and plan to reduce spending during the holiday. The poll of 300 people was conducted by the Hong Kong Federation of Trade Unions in Tseung Kwan O, Sha Tin, Tai Po and Sheung Shui early this month.

A billion-plus Asians welcomed the Year of the Dragon on Monday with a cacophony of fireworks, hoping the mightiest sign in the Chinese zodiac will usher in the wealth and power it represents. From Malaysia to South Korea, millions of people travelled huge distances to reunite with their families for Lunar New Year - the most important holiday of the year for many in Asia – indulging in feasts or watching dragon dances. As the clock struck midnight, Beijing’s skyline lit up with colour as families across the Chinese capital set off boxes and boxes of fireworks to ward off evil spirits in the new year ¬ a scene repeated across the country. Pollution levels in the city, which has come under fire for its bad air quality, spiked in the early hours of Monday morning as fireworks filled the skies with particulates, before falling back down again, official data showed. North Koreans marked the Lunar New Year by laying flowers before portraits of late leader Kim Jong-Il and recollecting his “undying feats”, the official news agency reported. Those living in the Philippines were able to sleep in on Monday after the Lunar New Year became an official holiday for the first time, despite objections from some in the business community. The dragon is the most favourable and revered sign in the 12-year Chinese zodiac – a symbol of royalty, fortune and power that is also used in other cultures that mark the Lunar New Year. Hospitals across China and in Chinese communities are bracing for a baby boom as couples try to have a child this year. Nannies in Beijing and neighbouring Tianjin have hiked up their prices for this year and the beds in the capital’s Maternity Hospital are all booked up until August, according to the official Xinhua news agency. Singapore’s Prime Minister Lee Hsien Loong even took advantage of the Dragon to urge the country’s residents to boost a stubbornly low birth rate, in an attempt to reduce the government’s reliance on foreign workers. “I fervently hope that this year will be a big Dragon Year for babies... This is critical to preserve a Singapore core in our society,” he said in his new year message. But in Hong Kong, where tens of thousands of pregnant mainlanders come to give birth every year to gain residency rights for their children, a Dragon baby boom could exacerbate problems of limited beds and soaring delivery costs. According to some astrologers and geomancers, the Dragon may bring natural disasters and financial volatility to an already unstable world. Hong Kong feng shui master Anthony Cheng warned a “scandalous corruption case” would rock China in the second half of this year and said high-ranking Chinese officials would be forced to resign, jailed or even die. But across Asia most ignored the doomsday predictions, instead praying, feasting and celebrating with their families. In Malaysia, where 25 per cent of the population is ethnic Chinese, highways were clogged at the weekend while the capital Kuala Lumpur became almost deserted as people travelled home. The new year began in tragedy for a family in central China’s Hunan province when a man set off explosives at a feast at his cousin’s house over a land dispute, killing himself and four others. More than half of the population in South Korea, which also celebrates the Lunar New Year -- some 31 million people -- took to roads, railways and planes for the holiday.

International co-operation involving Hong Kong is helping to smash illegal tobacco-growing operations on the mainland. British authorities working to stem the flow of illicit cigarettes from China to Europe have heaped praise on their counterparts in Hong Kong and mainland China for their achievements, which include the seizure of 10 tonnes of tobacco and 713 cigarette manufacturing machines. "These Chinese efforts really have had a market impact in the UK and other European states because they have driven down production," said Euan Stewart, deputy director of criminal investigations at Britain's HM Revenue and Customs. "It has been so successful that from seven provinces where illicit tobacco was manufactured and smuggled out of China to the European market, this has now been driven down to two provinces." Hong Kong customs and excise commissioner Clement Cheung Wan-ching said the recent seizure of 10 tonnes of hand-rolling tobacco bound for Britain was an example of the success of the partnership. "We've been working very closely with our UK and mainland colleagues," Cheung said. "Their revenue officers have been in communication with our officers and the latest incident when we uncovered the largest single police case involving the smuggling of tobacco into the UK is a testament to the co-operation that has been going on." Stewart said he had seen a growing willingness to share information from Beijing's Anti-smuggling Bureau and the State Tobacco Monopoly Administration. "You need good dialogue and trust to work with any Chinese official, either in Hong Kong or the mainland, and I believe we have achieved that," Stewart said. "We've created an environment of trust where both parties benefit and operate effectively. "There's a definite willingness to share, sometimes quite sensitive intelligence, and we're very grateful for that. We see it making a difference. There's a whole lot less product reaching our frontiers." Anil Gogna, a fiscal and drugs liaison officer at the British consulate in Hong Kong, said Hong Kong was a key anti-smuggling partner in Asia. "In China, counterfeit cigarettes have been seized and illicit tobacco factories have been found and shut. It has all had a knock-on effect on smuggling into the UK and Europe," he said. Cheung said Hong Kong customs had two main areas of co-operation with the mainland. The first is when tobacco is seized and its mainland source is identified. Information is shared with mainland authorities to see if enforcement action can be taken. The second comes when mainland internet portals are used to sell tobacco to Hongkongers. "Hong Kong is a free port, anyone can carry a reasonable amount of commodities across the border. But seeing as those commodities may be taxable on the mainland, we have a lot of co-operation. It's very much a two-way street," Cheung said.

 China*:  Jan 25 2012 Share

Xi Jinping, the man widely expected to become China's top leader this year, will take his biggest step into the international spotlight Feb 14 when he meets President Barack Obama on his first official visit to the U.S. as vice president. The White House said Monday that Mr. Xi will meet Mr. Obama and Vice President Joe Biden in Washington, and also visit Iowa and California—unusual additions to the itinerary for an heir-apparent. The widely anticipated visit could help him boost his stature at home while offering U.S. officials a rare chance to learn more about him before he takes over as Communist Party chief in a once-a-decade leadership change in the fall. It will also help to set the tone for relations between China and the U.S. over the next decade. Mr. Xi will be the most senior Chinese leader to visit since Mr. Obama announced in November a new strategic focus on Asia to counterbalance China's growing assertiveness in the region. Mr. Xi will discuss "a broad range of bilateral, regional, and global issues" in his meetings with Messrs. Obama and Biden, the White House said in a statement Monday, without providing precise dates for the trip or other details. China's Foreign Ministry didn't respond to telephone calls seeking comment on Tuesday, which is a national holiday in China to mark the second day of the Lunar New Year. But analysts and diplomats had suggested that Mr. Xi would include Iowa in his itinerary to demonstrate a personal connection with the U.S.: He visited the state in 1985 when he was a local official in the northern province of Hebei, according to Iowa Gov. Terry E. Branstad. A statement from Mr. Branstad's office Monday said he discussed Mr. Xi's 1985 visit with him while on a trade mission to China in September, and that Mr. Xi said he was "impressed with the hospitality and friendliness of Iowans, and named a number of the Iowans he met with." "I want to thank Vice President Xi for taking me up on my offer to visit Iowa," Mr. Branstad said in the statement. "The strong relationship Iowa has with the incoming leader of China has economic benefits that are beyond measure. This is a tremendous opportunity for Iowa, and we will make the most of our time with Vice President Xi." He said the precise schedule was still being finalized and would be announced later. The Iowa leg would also help to demonstrate the economic benefits of commercial ties with China. According to the U.S.-China Business Council, Iowa exported $627 million of goods to China in 2010. California was likely chosen as it has a large Chinese community, as well as a flourishing high technology industry that China seeks to emulate. It exported $12.5 billion worth of goods to China in 2010, more than any other U.S. state, according to the business council. Analysts and diplomats say the visit is Mr. Xi's most important opportunity yet to establish his identity and enhance his standing both at home and overseas before he takes over from Hu Jintao as party chief, and then as President at a parliament meeting in March 2013. Outside the party elite, little is known about Mr. Xi—the son of a Chinese revolutionary leader—except what is revealed in his official biography and a leaked U.S. diplomatic cable that quoted him telling a U.S. ambassador that he liked Hollywood films about World War II. Mr. Hu made a similar visit to the U.S., taking in Washington and New York, a few months before he took power in 2002, though he offered few clues as to what changes he might bring to the Chinese leadership. Mr. Xi, who is 58 years old and has a daughter studying at Harvard University, had also been expected to pay a visit to the U.S. early this year after hosting Vice President Biden in China last year. On that trip, Mr. Xi took the unusual step of meeting Mr. Biden several times, accompanying him on a trip to the western province of Sichuan, and sharing an informal dinner with him in a local restaurant. Some U.S. officials and analysts saw that as a sign that Mr. Xi will be more open and confident than Mr. Hu. But they also say that he has stuck closely to the official script in those meetings, and been careful not to upstage his predecessor—a concern that is also likely to dominate his visit to the U.S.

Visitors tour a lantern festival held at the Old City God Temple of east China's Shanghai Municipality, Jan 23, 2012, the first day of the Chinese Lunar New Year.

Taiwan technology giant Foxconn has apologized over comments by chief Terry Gou allegedly comparing workers to animals, a report said on Monday. Gou drew criticism on online news forums and discussion sites after he was quoted by Taiwanese media as saying “I have a headache how to manage one million animals” at the company’s year-end party in Taipei Zoo earlier this month. Foxconn is the largest maker of computer components and assembles products for Apple – including the iPhone – plus Sony and Nokia. It employs about one million workers in China. The company issued a statement over the weekend to apologise to “anyone who feels offended” but stressed that Gou’s remarks were taken out of context by the media, according to the Taipei-based Now News website. “Gou is aware that the media reports are misleading and offensive and he apologises to anyone who feels offended. However, Gou did not deliberately slander the workers as some media described,” it quoted Foxconn as saying. Foxconn was not immediately available for comment.

Bird's-eye view of Beijing on New Year's eve - Photo taken on Jan. 22, 2012 shows the bird's-eye view of the Olympic Green in Beijing, capital of China, on the eve before Chinese lunar Year of Dragon.

Hong Kong*:  Jan 24 2012 Share

Cathay Pacific Airways (SEHK: 0293) splashed out on an order for six additional Airbus A350-900s yesterday, and will deploy the planes on European routes after taking delivery in 2016 and 2017. The airline, which already has more than 90 aircraft on order, said the basic list price of the planes totaled US$1.63 billion, but that it had received "significant price concessions" from Airbus. The European planemaker raised the list price of most of its aircraft by 3.9 per cent from January 1. Captain Richard Hall, the airline's director of flight operations, said the aircraft, which can seat 314 people in three classes, are unlikely to replace the carriers' ageing Boeing 747-400s which are 17 to 24 years old. Instead, they will be used to increase flight frequencies to existing destinations and help Cathay Pacific add more cities to its network. Hall said it was too early to say which new services could be launched using the aircraft. The carrier already has 32 A350-900s on order that were contracted with Airbus in September 2010 and March last year. Some 19 smaller Airbus A330-300s and 26 Boeing 777-300ERs have also been ordered for passenger services, together with additional freighters. Andrew Orchard, a regional transport analyst at RBS, was "not that surprised" by the latest deal which took Cathay Pacific's total order tally to almost 100 aircraft. "It does sound a lot, but they will come in stages," he said, adding that many of them would replace existing aircraft so the "actual capacity increase is quite small". Cathay Pacific said the A350-900s purchase would be financed by bank loans, other debt instruments and cash reserves. The carrier will make seven interim payments on each of the aircraft, followed by a "substantial" payment on delivery. Orchard said the possibility of higher interest rates is among the challenges facing the carrier. Martin Craigs, chief executive of the Pacific Asia Travel Association, said the new order meant "more non-stop services" and "more connectivity to Hong Kong". He said it showed Cathay Pacific's commitment to "long-term planning" in expanding the airline despite relatively short-term economic concerns. The A350s will be more fuel efficient than the carrier's existing fleet. Airbus claimed the aircraft, which will be capable of flying 8,100 nautical miles non-stop, will burn 25 per cent less fuel and be 25 per cent cheaper to operate. But production difficulties have delayed the A350 series by several months. Final assembly of the first test aircraft, which was initially due to start by the end of last year, is scheduled to begin by June, with the first flight in the first quarter of 2013. Launch customer Qatar Airways is now due to receive its first A350-900 in the first half of 2014, six months later than planned, while Cathay Pacific will get its first aircraft in 2016. The latest deal came a month after Airbus said it signed a deal for 10 double-deck A380s with Hong Kong Airlines on December 19. The order was confirmed by Airbus in its review of 2011 orders and deliveries published last Tuesday.

Dried Japanese and Chilean devil rays and manta rays for sale at a dried seafood shop on Ko Shing Street in Sheung Wan. Growing demand from Chinese medicine practitioners for a little-known part of the giant manta ray is threatening the global population of the much-loved sea creature, conservationists say. Researchers, including a Hong Kong-based conservation photographer, say the use of dried gill rakers from manta and mobula rays has risen dramatically in recent years as supplies have become scarce. Gill rakers, thin filaments the rays use to filter food, are prescribed by some traditional Chinese medicine practitioners to treat everything from chicken pox to cancer, the researchers say. Practitioners claim the ingredient can "boost the immune system and help purify the body by reducing toxins and fever and enhancing blood circulation". "Others claim that gill rakers will remedy throat and skin ailments, male kidney issues and help couples with fertility problems," according to the "Manta Ray of Hope" report, produced by conservation groups Shark Savers and WildAid. The report says that the global populations of manta and mobula rays, also known as devil rays, are rapidly declining due to unregulated fisheries and, in part, demand for gill rakers. The rays take up to 10 years or more to reproduce and when they do, they typically produce just one pup every two or three years. One of the lead investigators was Hong Kong-based conservation photographer Paul Hilton, who started the manta ray project a few years ago when he noticed the gill rakers while researching another issue close to his heart: shark finning. "We first came across manta and mobula ray gills in Asian markets several years ago and followed the trail to the dried seafood markets of Southern China," he said. The team investigated dried seafood markets in Hong Kong, Macau, Guangzhou, Singapore and Taiwan, with Guangzhou emerging as the centre of the trade. In 2010, the team carried out DNA testing of gill rakers in Guangzhou, followed by investigations in Hong Kong. The 40-page report claims that ecotourism from manta and mobula rays is worth more than US$100 million a year while the gill raker trade is about US$11 million. Shark Savers director Michael Skoletsky said immediate action was needed to save the creatures from regional extinction. "Anyone who has gone diving with mantas know them to be intelligent, graceful and engaging animals. It would be a tragedy to lose them," he said. Called peng yu sai in Cantonese, the gills vary in size according to the manta or mobula ray it has come from. A handful of shops along Sheung Wan's Ko Shing Street sell the gills. Fung Kam-chi, owner of the Shun Hing shop, said demand was growing and low supplies meant prices had more than doubled in recent years. In 2006, a catty of small gill rakers would fetch about HK$300, but this same amount would now cost HK$750 to HK$850. His stocks include large manta birostris gill rakers, which he said could be eaten with congee or in a soup to treat thyroid disease or chicken pox. Fung, who said the gills came from Indonesia and the Philippines, also has smaller gill rakers from two mobula ray species: Chilean and Japanese devil rays. A few doors down at another herbal medicine store Lee Yuen Hong, owner Ieong Kuok-ieng also confirmed that demand for gill rakers was on the rise but that supplies were not stable. Customs officials and the Agricultural, Fisheries and Conservation Department could not provide statistics on the amount of manta or mobula ray gill rakers imported into Hong Kong.

The candidates for chief executive joined the crowds browsing Lunar New Year fairs ahead of the holiday - but it will take the fiery breath of the dragon to keep vendors and shoppers from shivering through the last hours of the events. Henry Tang Ying-yen, a child of the auspicious Year of the Dragon, attended a fair at Morse Park in Wong Tai Sin with his wife, Kwok Yu-chin, and three of his four children. Arriving shortly after the opening of the fair, arranged by the Democratic Alliance for the Betterment and Progress of Hong Kong, Tang and his family visited stalls and chatted to district councillors. They snapped up HK$300 worth of sweets and trinkets. His rival Leung Chun-ying, born in the Year of the Horse, joined the crowds in Victoria Park with his wife Tong Ching-yi before flying to Britain, where the couple will visit their children for the holiday. They spent more than HK$1,000 on soft toys and flowers. While Leung heads for a British winter, Hongkongers are bracing for chilly conditions during the holiday. The mercury will drop to as low as 10 degrees Celsius today and may fall as low as 9 degrees tomorrow - New Year's Day. Stallholders, who will be looking to maximise profits before the fairs close in the early hours of tomorrow morning, say they are concerned that the cold and expected rain will dampen the mood. One flower seller in Wong Tai Sin, already struggling after the price of flowers rose by 20 per cent due to the rise of the yuan, said she planned to cut prices to clear her stock. "I've kept my prices the same as last year because we serve customers that live in the neighbourhood and are familiar with us. We want to be consistent for them," she said. "They trust that our flowers are top quality, and that is the only way we've managed to stay in business. "Last year, people were more willing to spend, but this year, people are not as easy with their purse-strings." She said people visiting her stall were typically spending around HK$100 on flowers.

 China*:  Jan 24 2012 Share

China's crude steel output increased 8.9 percent year-on-year to 683.27 million tonnes last year, 0.4 percentage points slower than the growth rate of 2010, according to the latest data provided by the country's top economic planner. Last year's steel output helped China secure its title as the world's largest steel producer. The National Development and Reform Commission (NDRC) said in a statement on its website that the 2011 rolled steel production growth also slowed by 2.4 percentage points to 881.31 million tonnes, up 12.3 percent year-on-year. The NDRC quoted customs data as saying China's imports of iron ore rose 10.9 percent year-on-year to 686.06 million tonnes last year, while exports of steel products amounted to 48.88 million tonnes, up 14.9 percent year-on-year. Steel prices continued to decline in December 2011, with the steel price composite index falling to 120.95 points, down 1.44 points from November. The index wavered between 130.74 points and 136.04 points in the first three quarters of last year, according to the NDRC. The NDRC's latest data showed the steel industry posted a combined profit of 295.2 billion yuan (46.75 billion U.S. dollars) in the first 11 months of 2011, up 29.9 percent year-on-year.

Premier Wen extends Lunar New Year greetings to oil workers - Chinese Premier Wen Jiabao extends Lunar New Year greetings to oil workers at a dinner at the Changqing Oilfield in Qingyang, Gansu Province, Jan. 21, 2012.

Chinese banks sold more foreign currency than they bought from clients in December, reflecting that companies and individuals have become more willing to hold foreign currencies, the country's foreign exchange authority said Saturday. Chinese lenders bought $142.5 billion on behalf of clients in December, while they sold $157.8 billion, marking the second monthly deficit, the State Administration of Foreign Exchange (SAFE) said in a statement on its website. The December deficit stood at $15.3 billion, up from $800 million recorded in November. The SAFE data came after the central bank said earlier this month that the country's yuan funds outstanding for foreign exchanges fell to 25.36 trillion yuan in December, the third monthly decline. Analysts said the deficit, like falling yuan funds, was a result of a narrowing trade surplus, a slowdown in the growth of foreign direct investment and weakened expectation for yuan's appreciation. Last year, Chinese banks bought $1.6 trillion in foreign currency, and sold $1.23 trillion, leading to a surplus of $367.8 billion, the SAFE said in the statement.

Hong Kong*:  Jan 23 2012 Share

Hong Kong firm US$4.6 billion deal with Long Beach Port Authority - Orient Overseas Container Line is set to enter the Year of the Dragon with an agreement for a new United States Pacific gateway at Long Beach that will be the biggest rental deal in US port history. The Tung family-controlled shipping company should hear early next week whether the Port of Long Beach in California will sign a US$4.6 billion, 40-year lease for the Middle Harbour container terminal. The two sides reached a tentative agreement on Thursday but the deal, which has been recommended for approval, needs to be ratified by the port's harbour commissioners on Monday. Confirmation of the proposed pact came as OOCL saw a 1.5 per cent drop in total revenues to US$5.53 billion last year, parent company Orient Overseas (International) (SEHK: 0316) said yesterday. This was despite a 5.6 per cent increase in container volumes to 5 million teu (20-foot equivalent units), up from 4.77 million teu in 2010. Karl Adamowicz, the port's director of real estate, said the facility "will be the most competitive, technologically advanced and greenest terminal in the US" with shore-side power to supply electricity to ships, enabling onboard diesel auxiliary engines to be switched off. Philip Chow Yiu-wah, OOCL CEO, said the agreement "demonstrates our long-term commitment to the port of Long Beach as the gateway of choice for North America". The port will spend US$1.2 billion to create the 121.6 hectare Middle Harbour complex, which will combine two existing terminals - including the 36.3 hectare Pier F operated by OOCL subsidiary Long Beach Container Terminal - into a single terminal. The project, which will double existing capacity, includes the construction of 1.41 kilometres of new wharves, rail facilities and 37 container-storage areas. OOCL will spend a further US$500 million on new cargo-handling equipment.

The head of the Immigration Department yesterday dismissed suggestions that the government had resorted to scare tactics in its fight against pleas by domestic helpers to be allowed the right of abode in Hong Kong. Eric Chan Kwok-ki, director of immigration, rejected claims that the authorities were playing on the public's fears by releasing data showing that 125,000 foreign domestic helpers have been living in the city for seven years or more. Most people who have worked in Hong Kong for seven years are entitled to permanent residency, with the exclusion of domestic helpers. "It's a factual number," Chan said, when asked about the figure. "It's not an estimate of how many foreign domestic helpers would apply [for right of abode]. [It] is a figure of the number of foreign domestic helpers who have lived [in Hong Kong] for seven years." His comments came on the day that the South China Morning Post (SEHK: 0583) revealed that just 631 foreign domestic helpers, some 0.5 per cent of the 125,000 total, have applied for permanent residency since September, when the High Court ruled that the ban on residency for domestic helpers was unconstitutional. The court's ruling, which the government is appealing against, was made in the case of Evangeline Banao Vallejos, a Filipino helper who has lived in Hong Kong for 25 years. During the judicial review, government lawyers argued that changing the law would lead to an "influx" of immigrants. Mark Daly, a human rights lawyer who represents domestic helpers seeking right of abode, repeatedly said the government's figure was "wildly exaggerated", calling it a scare tactic. Chan said the figure of 631 applications should be disregarded, as the processing of right-of-abode applications have been on hold since the September ruling. "We believe that because we have announced we would not process [any right-of-abode applications] until the final court decision, a majority of [eligible] applicants did not file their applications," he said. Chan said he would not speculate about whether the number of right-of-abode applications would surge after the final court decision on the Vallejos case. However, he said there would be "a very big difference" if the processing of residency applications was reopened now. The government's appeal against the ruling in favour of Vallejos will be heard on February 21.

By-elections will be retained, but lawmakers who resign mid-term will be barred from standing in by-elections for six months, under the latest proposal the government has unveiled to plug what it calls a "loophole". The government hopes for Legislative Council approval this year. The "loophole" was used by five lawmakers in 2010, to the government's annoyance. They resigned to force what they dubbed a de facto referendum on the pace and scope of democratisation. Yesterday, Secretary for Constitutional and Mainland Affairs Raymond Tam Chi-yuen said the plan had "mild, proportionate and reasonable restrictions" to prevent lawmakers abusing the system, and he was confident it would weather any legal challenges. He said the bar would apply to all geographical and functional constituency lawmakers. However, the proposal is expected to face strong opposition from pan-democrats, and one lawmaker vowed to deploy delaying tactics to block the bill. In May last year the government proposed scrapping by-elections and filling mid-term vacancies with the candidate who obtained the next most votes in the previous poll. But that proposal triggered a public outcry and was labelled unconstitutional. The government then revised the proposal and conducted a two-month public consultation. Tam, unveiling the new proposal yesterday after endorsement by the Executive Council, said the government had received more than 31,000 written submissions. Most favoured retaining the by-election system. Tam said the new proposal - which would be put forward for Legco scrutiny next month - was constitutional, according to independent legal advice from Lord David Pannick QC. "A six-month period is long enough to deter abusive conduct and not so long that it would render the restriction more than is necessary to address the mischief," Tam said. "Restrictions may be imposed on this right [to stand in an election] so long as they are proportionate to a legitimate aim, and the Basic Law gives the Legco a broad discretion in determining the contents of the legislation which governs the `specific method' for forming the Legco." Government-loyalist lawmakers, including members of the Democratic Alliance for the Betterment and Progress of Hong Kong, the Federation of Trade Unions and the Liberal Party, said they would support the new proposal. But pan-democratic lawmakers - who have 23 votes in the 60-seat Legco - stood firm against it, criticising the amendments as unconstitutional because they scrapped a person's right to stand for election. Albert Chan Wai-yip, of People Power, said he might use delaying tactics to block the bill. When Legco's four-year term ends in July, unfinished bills will lapse. "If we propose hundreds of amendments and other lawmakers co-operate, I don't think the bill can be passed in July," Chan said. Democratic Party vice-chairwoman Emily Lau Wai-hing said her party opposed the proposal, but had not decided whether to join Chan's delaying tactics.

A legal battle looms as the owner of Ho Tung Gardens says she is determined to demolish her family home even as the government is set to declare it a monument. Ho Min-kwan, the granddaughter of the late tycoon Robert Hotung, said her only wish all along had been to continue to live on the site and replace the old house with 10 new ones. "What I ask for is to let me demolish the house and live here happily and not to disturb me," said Ho, who is in her 70s. She was speaking a week ahead of the expiry of the one-year provisional monument status imposed by the government last year after it was informed of her plan to demolish the main house. In the negotiations that followed, Ho rejected a land swap offer, saying the replacement site she had been offered behind the mansion would require chopping down trees and provide less privacy. Ho plans to replace the main house with 10 cottages - valued by her surveyors at HK$7 billion - and keep one for herself. A narrow strip of land on the other side of a stream that runs through the site - where a Chinese-style garden including a pagoda, a pavilion and a swimming pool stands - would be preserved. She said she had not decided whether to lease or sell the other nine cottages if she pursued the redevelopment, but denied her motive was to make money. Asked if a sale of the properties would make her lose control of the site and therefore defeat her self-proclaimed intention to "keep [her] family home", Ho replied: "It will still be Ho Tung Gardens. I can get a management company to take care of the place." Historians say the estate, built by Hotung in 1927 for his second wife, Clara, is an example of Chinese Renaissance architecture and a reminder of an important chapter in the city's colonial history. Hotung was the first non-European permitted to live on The Peak. Ho said she would wait for the government's final decision before deciding whether to launch any legal action to seek compensation. "I am not asking taxpayers to pay HK$7 billion to me ... With this amount of money, the government can do many other things," she said. She said she did not find the building an interesting piece of architecture, since many alterations and additions had been made since it was bombed by the Japanese during the second world war. The house was then divided into six apartments, of which three were leased. Ho lives in one of the apartments. She said if the government was really so keen to preserve the house, she could give away the building elements and let officials reassemble them on another site, as with Murray House in Central, which was reassembled in Stanley. Dr Lee Ho-yin, a consultant who compiled an architectural study on the case for the government, said the alterations and additions, made by the house's original architecture firm, Palmer and Turner, would not affect the building's authenticity. He said it was already an "outdated" practice to break down a historic building and reassemble it in another place, as this would ignore the building's context.

Chief executive hopeful Henry Tang Ying-yen is closing the gap in the popularity ratings with his key opponent, although he is still 13 percentage points behind Leung Chun-ying, according to a new survey. Leung remains the most popular choice to be the city's next leader, with support from 42.9 per cent of 1,022 respondents polled from Monday to Thursday. Tang came second with 29.7 per cent, while Albert Ho Chun-yan trailed in the third place with 9.1 per cent. Another 18.3 per cent expressed no preference. The poll, conducted by the University of Hong Kong's public opinion program, was the first of the five weekly surveys co-commissioned by the South China Morning Post (SEHK: 0583). An earlier survey conducted from November 28 to December 1 showed Leung's support was almost double Tang's, at 47.3 per cent of 1,012 respondents. Tang was backed by 23.8 per cent of respondents in that survey while 3.7 per cent opted for Democratic Party chairman Ho. Tang, the former chief secretary, has cut into Leung's lead in popularity from 23.5 percentage points in the last poll to 13.2 percentage points in the latest survey. Chan Kin-man, an associate professor with the Chinese University's sociology department, said the drop in Leung's popularity partly stemmed from his high-profile criticism of Sing Tao Daily, which last month reported alleged investment losses by Leung. "But Leung's edge of 13.2 percentage points over Tang is still considerable," Chan said. "If Tang fails to further narrow the gap in the next two months and his popularity ratings remain below 30 per cent, the central government would find it hard justifying its support for him." Tang is seen as the preferred candidate of Beijing and the business community. The city's next leader will be chosen on March 25 by the 1,200-member Election Committee, which is made up of Beijing-loyalist businesspeople and professionals. Ma Ngok, a political scientist at Chinese University, said Tang had managed to close the gap in popularity ratings with Leung in the past few weeks, but Tang's momentum in catching up appeared to be slowing. "I'm not sure whether the latest poll reflects the latest development in the election battle," Ma said. The latest survey was conducted days after Tang criticised the Urban Renewal Authority for selling "pricey" and "fancy" flats. The authority is headed by Barry Cheung Chun-yuen, Leung's campaign office chairman. On January 15, Tang referred to unauthorised structures on the small houses of male indigenous villagers as "so-called illegal structures". Tang's comment marked an apparent departure from the government's line and was seen by pan-democrats as an attempt to win support from the powerful Heung Yee Kuk rural body. The latest survey had a 66.1 per cent response rate and a sampling error of plus or minus 3.1 percentage points, with a 95 per cent confidence level. Federation of Trade Unions president Cheng Yiu-tong said none of the federation's 60 Election Committee members would nominate either Tang or Leung at this stage and their stance would probably not change before nominations started on February 14. "With their hard work, both of them should be able to win the [required] 150 nominations to enter the race," Cheng said. He was speaking after his federation's forum for Tang and Leung. Cheng said they had yet to decide who to vote for in March 25 election and whether their 60 members would support the same candidate.

Cathay Pacific Airways (SEHK: 0293) said on Friday it had agreed to buy six Airbus long-haul aircraft for less than US$1.63 billion as part of its expansion plans. The Hong Kong-based airline told the stock exchange it had purchased the A350-900 planes with “significant price concessions” from the manufacturer, for delivery between 2016 and 2017. “It is normal business practice of the global airline industry to disclose the aircraft basic price, instead of the actual price, for aircraft acquisitions,” it said, putting the basic price at US$1.63 billion. The company will fund the transaction with commercial bank loans, other debt instruments and internal cash resources, it added. “The Airbus aircraft will replenish and expand the fleet capacity of the company,” it said. “The company expects that the Airbus aircraft will deliver improved payload range capability at competitive operating costs whilst providing high standards of passenger comfort and safety.” Cathay shares were up 1.8 per cent at HK$14.66 in mid-afternoon trade.

A top mainland leader says Henry Tang Ying-yen and Leung Chun-ying are both "acceptable" to Beijing as chief executive candidates, adding he hopes to see a fair fight in the race. Li Jianguo , vice-chairman of the National People's Congress (NPC) Standing Committee, praised both men for having done "plenty of work" for Hong Kong. Li was speaking at a meeting of nearly 100 city deputies to the NPC and the Chinese People's Political Consultative Conference (CPPCC) in Zhuhai last Friday. His remarks, widely interpreted as a dismissal of claims that Beijing had a favoured candidate, marked the first time that an official confirmed the central government's neutral stance on the chief executive contest. "Li hopes to send the message that Beijing has not made up its mind on who would be the next chief executive, and that both front runners would be able to secure required nominations for entering the race," said Wong Kwok-kin, a Hong Kong lawmaker from the Federation of Trade Unions. Several deputies at the meeting said Li, who is also the Standing Committee's secretary general, described Tang and Leung as men who "love the motherland and love Hong Kong". Li listed these qualities as the top of three criteria for judging chief executive hopefuls. The other two requirements are the ability to govern and "a certain degree of [public] recognition", said Chan Wing-kee, a member of the CPPCC's standing committee. Fanny Law Fan Chiu-fun, an NPC deputy and director of Leung's campaign team. said Li's remarks quashed the rumour that Beijing had already selected its favoured candidate ahead of the February nominations and the March vote. "Li said he hoped the [election] would be a fight with Queensbury rules, which would set an example for election of chief executive by universal suffrage in 2017," Law said. Law said Leung's campaign office would launch a fund-raising drive at the community level after the Lunar New Year. Separately, Leung said he doubted that Hongkongers believed that Beijing was already partial to a certain candidate. "Fewer people believe that it is an election [where the result] is known before the race," he said. "I think the liberal and open attitude of the central government should be well-received by the public. I have long believed that I can become [nominated as] a candidate, elected and appointed by the central government." A chief executive candidate has to secure at least 150 nominations from the 1,200-strong Election Committee to be eligible.

Taiwan has decided to extend the length of stay it permits foreign workers to meet growing demand from the island’s ageing population, officials said on Friday. Parliament passed a bill late on Thursday to extend their stay to 12 years from nine years following appeals from local families employing foreign helpers, said the Labour Affairs Council. The number of foreign laborers reached a record 425,660 by the end of last year, partly due to surging demand for live-in carers in Taiwan’s rapidly ageing society. Nearly 200,000 Southeast Asians –- most of them from Indonesia, the Philippines and Vietnam – were employed as care givers or maids while the rest were in the manufacturing sector, according to the council. People aged 65 and over accounted for 10.6 per cent of Taiwan’s 23 million population, the latest census showed, sell above the 7 per cent level at which a society is defined as ‘ageing’ by the World Health Organisation. Meanwhile, the island’s birth rate has plummeted to one of the world’s lowest in recent years, triggering concerns of serious social and economic problems from a severe manpower shortage.

 China*:  Jan 23 2012 Share

Shanghai's economy will continue to slow this year as the municipality targets 8 per cent growth amid weaker external demand and continued curbs on the property sector. The city's gross domestic product (GDP) expanded 8.2 per cent last year, one of the slowest-growing provincial-level regions in the nation, Shanghai's statistics bureau said. The figure beat mayor Han Zheng's estimate of 8 per cent last week, but it was one percentage point lower than the growth in the mainland's overall GDP. It was also the fourth consecutive year that Shanghai failed to achieve double-digit economic growth. "There is much uncertainty in 2012," Shanghai statistics bureau chief economist Yan Jun said. "Shanghai aims to embark on innovations to adjust the economic structure." Shanghai posted more than 10 per cent year-on-year growth in economic output between 1992 and 2007, buoyed by surging exports and increasing foreign direct investment. But the city has felt the pinch from the global slowdown since 2008, and officials are shifting their focus to the service sector from manufacturing. Last year, industrial output grew 6.5 per cent to 796 billion yuan (HK$980 billion) while service sectors generated added-value of 1.11 trillion yuan, up 9.5 per cent from 2010. Shanghai is striving to become a global financial centre, but the efforts haven't paid off over the past two years, largely the result of battered global markets. The State Council is taking a cautious stance on drastic liberalisation in financial markets, preventing Shanghai from strengthening its financial muscle. At the same time, Beijing has put on hold a plan to launch an international board at the Shanghai Stock Exchange, where foreign corporate giants could list yuan-denominated A shares. The city will also maintain curbs on the property sector, which used to be a key growth engine for the city's economy. In 2011, the contribution from the property sector to the city's economy dropped 0.5 percentage points to 5.3 per cent. Shanghai officials, including the mayor, said slower growth didn't necessarily mean that the local economy was in trouble. Shanghai reported a trade deficit of US$17.9 billion last year, but Yan said that was not a negative because the city was importing equipment to help generate future growth. In 2011, 21.2 per cent of Shanghai's major manufacturing firms reported losses, the statistics bureau said, compared to 17 per cent in the previous year.

In an effort to boost tourism in the United States and create jobs, President Barack Obama has ordered the streamlining of visa applications for the rapidly swelling ranks of tourists from mainland China and Brazil and the waiving of the requirement of a visa for visitors from Taiwan. Obama announced the initiatives on Thursday as he visited Disney World in Orlando, Florida, to highlight America's status as a premier travel destination. "America is open for business," Obama said. "We want to welcome you." Under the Executive Order signed by Obama, steps to boost US tourism include increasing non-immigrant visa processing capacity on the mainland and in Brazil by 40 per cent this year, simplifying and speeding up the process for visa applicants from those places, ensuring that 80 per cent of applicants are interviewed within three weeks and extending its visa waiver programme to Taiwan. Obama also asked that an inter-agency task force be set up to develop recommendations for expanding international tourism. According to the White House, the latest measures are expected to create more than one million jobs in the US in the next decade. Statistics released by the US Commerce Department showed that foreign visitors to the US generated US$134 billion in revenue in 2010. The US has taken note of the potential growth of tourism from emerging economies with growing middle classes, such as Brazil, India and the mainland. US Commerce Department statistics show that close to 50 million mainland tourists travelled abroad in 2009 and 56.5 million in 2010, but only slightly over 1 per cent of them travelled to the US. Tao Wenzhao, a researcher at the Institute of American Studies of the Chinese Academy of Social Sciences, said yesterday that the US was cutting the red tape because of its economic concerns. "China is known as a big market for outbound tourism, with over 140 countries being destinations for mainland tourists," Tao said. The strong buying power of mainland tourists had contributed greatly to tourism in other countries. Taiwan's foreign ministry hailed the increase in mutual trust between Taipei and Washington that has led to the US plan to include Taiwan in its visa waiver program. "It not only contributes to enhancing mutual trust between the two sides but also underlines the high degree of trust that the US has put in President Ma Ying-jeou's administration," Deputy Foreign Minister Tung Kuo-yu said. The US notified Taiwan late last month that the island would be included in its visa waiver programme, as a result of which the pro-independence camp in Taiwan accused the US of interfering in the island's presidential election by helping to boost Ma's re-election chances. Both Taipei and Washington brushed off the allegation, saying it had nothing to do with the election. Ma secured a second term in the voting last weekend. Foreign ministry officials estimated yesterday that if everything goes smoothly, within six months Taiwan should become the 37th participant in the visa waiver program. They said about 400,000 people from Taiwan visit the US each year - 80 to 90 per cent of them for tourism or business.

Shoppers at a Wumart hypermarket in Beijing show no sign of allowing the uncertain economic outlook to affect their New Year spending. Dragon breathes fire into new year spending spree - Food, gifts and even luxury goods fly off shelves as mainland shoppers ignore the gloom and superstores report bumper sales. Retail sales ahead of the Lunar New Year are strong on the mainland as consumers fill their shopping bags despite high inflation and the uncertain economic outlook. "The New Year shopping spree this year is no less strong than previous years," said Shi Jinhong, head of a Wumart supermarket in Ganluyuan, Beijing. He said daily sales in his 9,000-square metre market had doubled or even tripled during the past week while average customer transactions rose to more than 100 yuan (HK$123) from 50 yuan. Around 9pm on Thursday night, the supermarket was still packed with shoppers making last-minute purchases for the festival. Boxes of nuts, candy, fruits, wine, liquor and various New Year decorations are the most sought-after items in the market. Cui Jie, an engineer working for an IT company in Beijing, said he had bought a Sony camera as a year-end gift for himself and some snacks and gifts for his family and friends. All these cost him nearly 10,000 yuan. He had also budgeted 20,000 yuan for a trip to Shanghai, Hong Kong and Yunnan with his friends during the national holidays next week. "The prices are much higher than last year, but our bonus this year is not bad. I do want to reward myself after a year's hard work," said the 27-year-old. Another shopper, Wang Jing, who came from Hubei province to work in a natural gas equipment company in Beijing, spent around 500 yuan on clothing for her parents and nieces in her hometown. "I never thought to cut the (New Year shopping) budget for my family. It's the only time for us to get together," said Wang, 21. The increase in the consumer price index reached 5.4 per cent on the mainland last year, far higher than the government's target of 4 per cent. After peaking at a rise of 6.5 per cent in July, the figure dropped to 4.1 per cent last month. Li Yanchuan, president of CSF Market in Beijing, said that "pre-festival sales" for the past two weeks had been 30 per cent higher than those last year. Food prices, especially for fresh vegetables, had fallen from last year and remained stable this month, he said. "Customers are looking for better value for their money," said Li. Most major supermarkets on the mainland, including Carrefour, Walmart and Wumart, have extended opening hours to midnight in some of their shops to deal with a significant growth in customer traffic. Aside from traditional retailers, online shopping portals also benefit from the annual spending spree. , one of the largest online luxury goods sellers on the mainland, said it had seen more deals worth more than 100,000 yuan in recent weeks. The average customer transaction grew to 3,000 yuan from 800 yuan over the past month.

Zhu in stinging criticism of anti-corruption failures - Zhu Rongji delivers his speech at the Peking Opera show in Shanghai. Former premier Zhu Rongji has implicitly criticised the central government for its failure to establish a corruption-free bureaucracy. Attending a Peking Opera show held by the Shanghai municipal government on Wednesday to celebrate the coming Lunar New Year, the 83-year-old reminded the 1,500 people in the audience - including more than 1,200 officials with the rank of bureau head - that the city had a "clean government" from 1987 to 1991 under his administration. "Looking back to the era when I was [Shanghai's party head] under the leadership of president Jiang Zemin, I once said that 'only when we watch closely the 506 bureau officials and give them the chance to contribute their talents, can the Shanghai government get our clean-government job done and be an invincible government," Zhu told the Shanghai officials. It was his second criticism of the mainland's state of affairs in the past year, following a broadside at the education system in April. Chen Yongmiao, a Beijing-based political analyst and rights activist, said Zhu was trying to flaunt his anti-corruption achievements as Shanghai party head and during his premiership from 1998 to 2003. "Zhu is a wise former senior official who skilfully expressed his gripes about the anti-corruption failures of incumbent officials, especially President Hu [Jintao] and Premier Wen [Jiabao]," Chen said. "In fact, he was praising his success in setting up a clean government image and criticising the incumbent leadership for failing to maintain such a good image." Zhu said many senior officials performed like opera singers when making speeches. "Your leaders get used to raising their voices when they are looking forward to getting your applause," he said. "Our [Peking opera] artists also do the same thing, also hinting that the audience should applaud by raising their singing."

China's ambassador to the United States Zhang Yesui on Friday said China will continue to promote the steady growth of its relations with the United States in 2012 and deal properly with their differences. Speaking at a reception held for representatives of local Chinese-American communities and Chinese students studying in the United States to celebrate the Chinese lunar new year, Zhang said the China-US relations were generally stable in the past year. During President Hu Jintao's successful state visit to the United States last January, the two heads of states reached an important consensus on building a cooperative partnership based on mutual respect and mutual benefit, he noted. China and the United States maintained intensive dialogues and communications in the past year, while bilateral economic and trade relations became ever closer with the total volume of bilateral trade surpassing $440 billion, a rise of 15.9 percent from 2010, Zhang said. Looking ahead into the year 2012, the Chinese envoy said China will work together with the US side to maintain steady growth of bilateral relations, through earnestly implementing the consensus reached by the two leaders, deepening dialogue, strengthening mutual trust and enhancing cooperation, while dealing properly with differences and sensitive issues.

Dragon decorations usher in the Chinese New Year 

Shares of China telecoms giant ZTE jumped on Friday after the company announced it would drop patent lawsuits with Swedish's Ericsson - Shares of ZTE (SEHK: 0763) Corporation, China's second-largest telecommunications equipment maker, reversed early gains to fall on Friday after the company and its Swedish competitor Ericsson decided to drop patent lawsuits against each other. Patent lawsuits are common in the global telecoms sector with competitors often suing each other over 3G or 4G technology or designs of handphones. “Even though it’s good news that the patent lawsuits are dropped, the market is still worried about prospects for the company, especially with uncertainties in the global economy,” said Alex Wong, a director at Ample Finance Group. “Google’s results last night also added to worries about the outlook for the global technology sector,” Wong said. ZTE’s Hong Kong and Shenzhen shares had traded sharply higher, but after the brief respite, fell sharply. By mid-morning trade, its Hong Kong shares were down 2 per cent, while its Shenzhen shares lost over 5 per cent to hit the lowest level since June 2009. ZTE said in a statement to the Shenzhen stock exchange that Ericsson would drop its lawsuits against the company in Italy, Germany and the United Kingdom, while ZTE would drop its lawsuit against Ericsson in China. On Thursday, ZTE fell sharply in Hong Kong and Shenzhen with traders attributing the plunge to rumours ranging from its lawsuit with Ericsson to expectations of disappointing last year results.

Zeng Hanlin picutred during his deportation from Canada to the mainland. Zeng who fled in 2004 to escape fraud charges was sentenced to 15 years in jail at a court in Chengdu on Friday, his lawyer said. A businessman from the mainland who was deported from Canada after more than a decade on the run was found guilty of contract fraud on Friday and sentenced to 15 years in jail by a court in Chengdu, in what his lawyer and family say is a test case for Chinese fugitives around the world. Zeng Hanlin, who fled to Canada in 1999, was charged in relation to a failed business merger, said his Canada-based lawyer, Daniel Kingwell. He fought unsuccessfully for refugee status and was deported last February when Canada ruled his fear of the death penalty, torture and an unfair trial were unfounded, Kingwell said. The 66-year-old’s family complained that no members of the media were allowed into his trial on November 17 or when the verdict was given on Friday. His son, Sam Zeng, one of two family members allowed into the courtroom in Chengdu in Sichuan province, said a previous lawyer who was locally hired told him he was under pressure to persuade his father to confess to the charge. According to a report from the official Xinhua News Agency in February, when Zeng arrived back in China there had been three previous cases of people extradited from Canada to face charges on financial crimes. The two countries do not have an extradition treaty. Kingwell wrote in an e-mail ahead of the verdict that the case has international significance “because it is a test case for the many other Chinese fugitives in Canada and other countries. They are claiming refugee status on the basis that they will not receive a fair trial, among other concerns.” Last year, Canada also deported Lai Changxing, the man long considered China’s most-wanted fugitive, to China, where he is accused of running a US$10 billion smuggling ring that dealt in everything from cars to oil in a scandal touching the government’s highest levels. He was extradited after China assured Canada he wouldn’t face the death penalty. Last month, state media reported that Lai had confessed to bribery and smuggling and prosecutors had indicted him for allegedly masterminding a smuggling network. At the time, state media said that according to 2010 police statistics there were nearly 600 suspects from the mainland at large overseas wanted for economic crimes. Zeng’s lawyer in court on Friday, Zhu Yalin, said Zeng was convicted of contract fraud and sentenced to 15 years’ imprisonment and a 2 million yuan fine (HK$2.46 million). The main office of the Chengdu Intermediate People’s Court referred calls on Friday to their No2 criminal court office, which referred calls to their propaganda office, where phone calls rang unanswered.

Lanterns lit up along Confucius Temple and Qinhuai River - A large number of lanterns were lit up along the Confucius Temple and Qinhuai River scenic belt to greet the coming Chinese Lunar New Year, which falls on Jan. 23 this year.

Chinese travelers to the United States will enjoy upgraded visa service soon as US President Barack Obama Thursday announced a new initiative to boost tourism. As part of a comprehensive effort to spur job creation, the administration mapped out a national strategy to make the US the world’s top travel and tourism destination. More than one million American jobs could be created over the next decade if the US increases its share of the international travel market. “Every year, tens of millions of tourists from all over the world come and visit America. And the more folks who visit America, the more Americans we get back to work,” said President Obama in the White House press release. The emerging markets such as China, Brazil and India are especially targeted in his plan as tourists from the three countries contributed about $15 billion and thousands of jobs to the US economy in 2010. The number of travelers from China is projected to grow by 135 percent by 2016 as compared to 2010. In addition, Chinese tourists currently spend more than $6,000 each, per trip, according to the Department of Commerce. Under the executive order, thenon-immigrant visa processing capacity in China will be increased by 40 percent this year and 80 percent of non-immigrant visa applicants will be interviewed within three weeks of the receipt of application. In order to achieve the goal,in select circumstances, qualified foreign visitors who were interviewed and thoroughly screened in conjunction with a prior visa application may be able to renew their visas without undergoing another interview, according to the new pilot program of the Department of State and the Department of Homeland Security under the initiative. The pilot program will also streamline visa processing for certain low-risk applicants, such as individuals renewing expired visas, or some categories of younger or older first-time applicants. “It will have a huge impact on our workload in China, it can free up about 100,000 slots for new applicants and we can issue more visas to first-time travelers,” Assistant Secretary of State for Consular Affairs Janice L. Jacobs said at the press conference Thursday. According to the UN World Travel Organization (UNWTO), China is the fastest growing travel market in the world, and is estimated to reach 100 million international travelers by 2020. In December 2007, the US and China signed a memorandum of understanding (MOU) to facilitate Chinese group leisure travel from China to the United States. Since the US was among the last countries to gain approval to promote group leisure travel from China, many US travel associations believe that the US has some catching up to do in improving the visa policy and travel service for Chinese travelers. Though the State Department has made progress in processing non-immigrant visas in China in recent years, handling more than a million visa applications in 2011, a 34 percent growth from the previous year, it still cannot meet the increasing demand. The complicated and time-consuming visa application to the US has long been a huge headache for most Chinese tourists. Since the bilateral trade ties are growing so fast, the visa issue is regarded as the top concern among Chinese business travelers.

A worker at Hisense in Qingdao, Shandong province, checks product quality. The TV producer has focused on technological innovation and set up research and development centers in Belgium and the United States. China's industrial output is expected to grow 8 percent annually during the remainder of the 12th Five-Year Plan (2011-15) period, down from 11.7 percent in 2011, the State Council said in its first medium- to long-term industrial restructuring and upgrading plan on Wednesday. The Ministry of Industry and Information Technology said the deceleration was a sign that the central government would focus on quality rather than speed during the next four years. "The plan requires a proper balance of quality and quantity in industrial development and a greater emphasis on innovation, technological improvement and energy conservation," the ministry said. Industry experts agreed with that assessment. Yuan Lei, deputy director of the Institute of Industrial Economics of the Chinese Academy of Social Sciences, told National Business Daily that 8 percent was a very low goal. Even during the financial crisis, industrial production growth didn't dip below 6 percent. Yuan noted that the target was lower than that set for the 11th Five-Year Plan (2005-10) period. "The reason is the country has decided to undertake an industrial transformation. If the aim is too high, local governments may pay more attention to speed rather than quality," Yuan said. Under the plan, which aims to shift the foundation of industrial growth from labor-oriented to value-added, research and development spending by large companies is expected to account for about 1 percent of their sales during the period. The proportion will be at least 3 percent for major industrial enterprises, while the number of patents held by Chinese enterprises is expected to double. China aims to boost the percentage of emerging industries' output to 15 percent of the total by 2015 for a better industrial structure, according to the plan. Meanwhile, the country is to reduce pollution and curb capacity in energy-intensive industries. Energy consumption for each unit of added value in industrial output is expected to drop by 21 percent from the levels at the end of 2010, and water consumption should slide 30 percent, while carbon emissions need to be "largely reduced", according to the plan. Yuan added that industrial companies should become more innovative, use advanced technology to save energy and eliminate obsolete capacity. Companies are being encouraged to improve product quality, create local brands, raise competitiveness through technological updating and explore overseas markets.

Beijing will speed up construction of subway lines and regional branch road networks to ease traffic pressure, according to the municipality's government report released Thursday. The city's mayor Guo Jinlong read the report at the fifth session of the 13th Beijing Municipal People's Congress, saying the city will open another four subway lines and construct 45 km of branch roads to form regional road networks to ensure the traffic flow this year. Other measures will include developing rental bike facilities and improving bike road lanes. According to the report, under the regulation of monthly lottery for new car plates put into use last year, the number of the city's annual automobile increase fell by 617,000 units, and the sales volume of autos dropped 44.3 percent year-on-year in 2011. Three new subway lines opened at the end of last year, bringing the total length of the city's subway lines to 372 km, which also helped ease traffic pressure in the city.

Hong Kong*:  Jan 22 2012 Share

Chief Executive Donald Tsang answers questions from lawmakers at a Legislative Council session in Admiralty yesterday. Chief Executive Donald Tsang Yam-kuen vowed yesterday to review public hospital emergency ward charges and clamp down on illegal inns to curb the influx of pregnant mainlanders to the city to give birth. Those were two of four pledges he made in a question-and-answer session with lawmakers as anger grows over competition for the city's public hospital resources by mainland women not married to Hongkongers. But Tsang, who is in office until June 30, stopped short of saying he would ask Beijing to suspend permits to pregnant mainlanders wanting to come to Hong Kong. And he sidestepped a question as to whether he would seek a reinterpretation of the Basic Law to deny right of abode to babies born to mainlanders. "The existing strategy is effective," he said. "It not only tackles the `symptoms' but also the root of the problem. It can get at the root if they are barred from entering Hong Kong." The public hospital emergency room charge for non-local mothers who need obstetric services - now HK$48,000 - will be reviewed. Leung Pak-yin, the Hospital Authority's chief executive, had said it was considering raising the price for deliveries in emergency wards for mainlanders, but no figure was given. Some HK$6.6 million of public hospitals' bad debt in 2010-11 was from non-local mothers not paying their bills, authority figures show. A second measure announced yesterday is a crackdown on illegal inns by the Home Affairs Department - to make it more difficult for pregnant mainlanders to find a place to stay in the city, Tsang said. The department would conduct a sting operation and liaise with property managers, he said. A department spokeswoman said officers would step up checks as more tourists came for the Lunar New Year holiday. More immigration officers and medical staff would be deployed at border checkpoints to help stop pregnant mainlanders without bookings at local hospitals, Tsang said. He reiterated that the government would work with mainland authorities to crack down on the agencies and vehicles that help pregnant mainlanders cross the border. In response to tourism sector lawmaker Paul Tse Wai-chun's query as to whether a reinterpretation of the Basic Law would be sought, Tsang said: "I believe the measures we are taking are effective ... I believe the problem can be solved." But pro-establishment and pan-democratic lawmakers said existing measures were not doing the job. "The current situation is already out of control," said legal sector legislator Margaret Ng Ngoi-yee, who urged the government to ask Beijing to suspend permits to pregnant women who want to visit Hong Kong. Lawmaker Starry Lee Wai-king of the Democratic Alliance for the Betterment and Progress of Hong Kong said the new measures would not solve the problem. Tsang also said he would discuss with the health minister ways to help mainland women married to Hongkongers give birth in the city. Tsang Koon-wing of the Mainland-Hong Kong Families Rights Association welcomed the move.

With high rents forcing many cinema operators out of business, they are calling for the addition of a provision to commercial land-use zoning regulations to guarantee a cinema in all districts. An uneven distribution of cinemas means many Hongkongers have to travel far to see a movie. In light of this, the Film Development Council will soon commission a study to review the situation. The vice-chairman of the Hong Kong Theatres Association, Chui Hin-wai, said that the number of cinemas had fallen from more than 120 during its peak in the late 1980s, to about 40. "Many districts do not have cinemas," Chui said, citing examples such as Sham Shui Po, Sheung Shui, Fanling and Tai Po. Chui said the nearest cinema for residents in Fanling, Tai Po and Sheung Shui was in Sha Tin. For residents of Sham Shui Po - one of the city's poorest districts - the higher transport costs might deter them from travelling elsewhere to catch a film, he said. Indeed, the situation is worsening, as Causeway Bay will soon lose UA Times Square, which has confirmed that it will close at the end of this month after 18 years. Times Square's management said the space would be reconfigured for retail stores, and that a new cinema would open on the 12th and 13th floors of the mall in just over a year. The Sunbeam Theatre in North Point, which hosts live Cantonese opera, will also close after next month. Following the closure of the Times Square cinema, just three cinemas - the MCL JP Cinema, UA Windsor, and President Theatre - will be left to serve residents of Wan Chai, Causeway Bay, Tin Hau and North Point, according to Chui. "We can't control what landlords want to do with their properties because this is their commercial decision," he said. "But we propose that a new provision for cinemas can be added to the commercial land-use [zoning regulations]." Chui said he hoped such a provision could reserve permanent spaces for cinemas, and that the government could work out incentives for landlords to reduce their rents and the cost of land. Grace Wong, group general manager of Kadokawa Intercontinental Group, which operates the MCL chain, said cinema operators generated much lower revenue than luxury retailers, who could afford to pay exorbitant rents to landlords, who in turn paid high prices at land auctions. Wong said the proposed provision would help development of the city's film industry. "The government supports local film productions, but you still need a window to showcase these films," she said. Wellington Fung, the secretary general of the Film Development Council, told the South China Morning Post (SEHK: 0583) its study would be completed in four to five months.

The Tourism Board's dragon-themed float will be among 11 others in the Cathay Pacific (SEHK: 0293) International Chinese New Year Night Parade on January 23. Together with 23 performing groups, the floats will parade from Hong Kong Cultural Centre Piazza to the Sheraton Hong Kong Hotel & Towers in Tsim Sha Tsui, starting at 8pm. Some of the groups will start performing at 6pm.

 China*:  Jan 22 2012 Share

Hang Lung's Grand Gateway mall in Shanghai, one of the company's mainland success stories. Hang Lung Properties (SEHK: 0101) says it has built up a war chest of more than HK$43 billion in cash and credit for future expansion. The ambitious plan comes after the developer reported underlying profit rose 29 per cent for the six months to last month, driven by strong rental income. Excluding a revaluation gain on investment properties, core earnings at Hang Lung - the first listed developer to announce its results for last year - were HK$1.65 billion for the six months to December 31, compared with HK$1.27 billion a year earlier. Turnover jumped 22 per cent to HK$3.06 billion from a year ago. Operating profit from property leasing grew 11 per cent to HK$2.3 billion, while property sales reached HK$150 million, up from just HK$2 million in 2010. Two flats at the Harbourside in Kowloon Station were sold at an average of HK$44,000 per sq ft during the period. Hang Lung declared a dividend of 36 cents. Parent Hang Lung Group (SEHK: 0010) saw its underlying profit jump 27 per cent to HK$1 billion in the period, and a dividend of 38 cents was given. The two companies have changed their fiscal year end to December 31 from June 30. "We are in no hurry to sell our new projects in Hong Kong as we have sufficient capital," said Ronnie Chan Chi-chung, chairman of Hang Lung Properties. Ho Hau Cheong, executive director of the company, said the firm had cash reserves of HK$23 billion plus a HK$20 billion undrawn credit line and had no immediate plan to tap the debt market. In addition, he said the firm could raise about HK$20 billion if it released up to 1,400 units - including 1,200 at Long Beach and 200 units at the Harbourside - for sale. Commenting on prospects for the mainland property market, Chan said it was difficult to make a forecast. "The mainland real estate market is heavily clouded by uncertainties. I'm unsure if now is a good time for land acquisition," he said. Mainland Hang Lung properties like Grand Gateway in Shanghai have been very profitable, but property sales and prices have dropped in general as cooling measures introduced by Beijing last year started to take effect. "It is unclear if the mainland property market has hit the bottom," Chan said. He said it was also not a good time for land acquisition in Hong Kong, despite the MTR Corporation (SEHK: 0066) withdrawing the sale of the Bayside site at Tsuen Wan last week owing to unsatisfactory offers. "We will buy when the market is entering a stage of darkness, which means none of our rivals have submitted bids [at a land sale or tender]." The tender sale for the Tsuen Wan site still received four bidders, he said. He expected rental income on the mainland to exceed that of Hong Kong in the short term. "It is just a matter of time, as we will add one to two million square feet of commercial projects on the mainland every year," he said. For the six months to last month, the mainland contributed 48 per cent of the company's HK$2.87 billion in gross rental income. As of June 30 last year, rental income from the mainland accounted for 45 per cent of the total. After the announcement of the strong results, shares of Hang Lung Properties rose 9.93 per cent to close at HK$26.50, while Hang Lung Group rose 7.39 per cent to HK$49.35.

The upholding of a death sentence against legendary 29-year-old Zhejiang businesswoman Wu Ying for fraud has sparked an uproar online, with many questioning if the penalty is proportional to Wu's crime. The decision announced on Wednesday afternoon by the Zhejiang High Court has also sparked intense debate, over issues like whether the entrepreneur was treated fairly in comparison to corrupt officials, the difficulties of mainland private companies in obtaining funds due to government policies, and whether it is reasonable to retain the death penalty for economic crimes. The sentence awaits a final review by the Supreme People's Court. Wu's dramatic life journey has been in the media spotlight since she became a millionaire at the age of 25. She started off working at her aunt's beauty salon in Dongyang city, and eventually established the giant Bense Holding Group. However, the fairy tale ended in February 2007 when she was arrested. The court sentenced Wu to death for fraud, saying that she illegally collected up to 770 million yuan (HK$947 million) from the public using high interest rates and deception. The decision immediately drew sympathy from many in the public, as they believed Wu was only a victim of current government policies, which make it very difficult for private companies to borrow from banks. The possibility of criminal charges for collecting funds from the public makes raising funds through private channels risky. Wu admitted to illegally collecting funds, but said it was only business gone bad, and denied intention to defraud. Her lawyers and the online community have another question: Authorities have pledged to reduce the use of the death penalty, especially for economic crimes, and many corrupt officials have been given suspended death sentences in recent years - so why must Wu die? Also, Wu co-operated and gave the names up of other guilty parties - including government officials - while in jail. Many posts asked if local officials want Wu to die for fear she might implicate others. "Killing Wu won't stop the operations of underground banks," said Professor Hu Xingdou of Beijing University of Technology, who has a blog on current events. "According to the current definition of illegal fund-raising, all money-lending from investors could be illegal, if done without the approval of the authorities. This charge only gives the authorities the right to monopolise China's finance and banking system, but does little to help small and medium-sized enterprises to raise money for their business." "There will only be more Wus." Microblog user Han Zhiguo gave the example of former Bank of China official Yu Zhendong, who with his accomplices swindled more than US$80 million and illegally used 132 million yuan in public funds. He was only sentenced to 12 years.

Hong Kong*:  Jan 21 2012 Share

Operation Santa Claus patron Selina Tsang, SCMP Group chairman David Pang (left), Grand Hyatt general manager Gordon Fuller and South China Morning Post acting editor-in-chief Cliff Buddle (right) at the ceremony. The global economic gloom has not stopped Hongkongers digging deep, with a record HK$16.5 million raised for Operation Santa Claus 2011. That beats the previous record, set in 2006, of HK$16 million. In 2004, HK$16.8 million was raised after the campaign was extended for two weeks to help victims of the Boxing Day tsunami. Secretary for Development Carrie Lam Cheng Yuet-ngor congratulated the organisers - the South China Morning Post (SEHK: 0583) and RTHK - at a ceremony hosted by the Grand Hyatt yesterday to celebrate the charity drive's success. "Most of the beneficiaries aren't big names that can organise fundraisers every year," Lam said. "Smaller NGOs that might not have the track record to receive government subsidies really benefit from community and corporate contributions." The appeal has helped more than 100 charities since 1988. Sixteen organisations will benefit from the HK$16,533,796 raised in 2011. Selina Tsang Pou Siu-mei, the wife of Chief Executive Donald Tsang Yam-kuen and honorary patron of the appeal, revealed the final figure. Cliff Buddle, acting editor-in-chief of the Post, said he was "delighted we have raised a record figure this year, especially as we are facing uncertain economic times. It is a credit to everyone involved. I was very pleased to see so many new major donors joining us and to witness such a wide variety of events that were so successful in raising funds for our 16 beneficiaries." Bryan Curtis, the head of RTHK's English programme service, said the appeal had outdone itself: "The trust in the institution of RTHK and South China Morning Post that many donors felt made a big difference." Melissa Moi, chief executive of the Children's Medical Foundation. thanked the donors yesterday on behalf of all the beneficiaries. "Operation Santa Claus' monetary support will ensure that families in Qingxinan prefecture in Guizhou province - a poor-world prefecture of more than three million people with an annual income of under HK$3,500 - will have access to life-saving neonatal care that will impact generations to come," Moi said. The donors had a lot of fun raising funds. Major donor JP Morgan was crowned the most creative for its dumpling-eating contest. The bank split its staff into teams of four with the aim of wolfing down 100 dumplings in eight minutes. Morgan Stanley's HK$2.45 million contribution made it the top corporate donor. Discovery Mind Kindergarten was the top school fund-raiser for a second year running, and St Mark's School was named most creative.

HK attracts more foreign firms in 2011 - InvestHK helped 6.7 per cent more foreign companies expand or get established in Hong Kong last year than in 2010 despite a very tough economic climate internationally, the agency reported in its annual review on Thursday. The investment promotion body assisted 303 foreign companies – up from 284 firms the year before. InvestHK Director General Simon Galpin said the mainland continued to be the largest source of investment in the city with a total of 56 projects, followed by the United States with 48, Britain 30, Japan 23 and Australia 19. “There was a sharp increase in the number of projects [last year] linked to the strong Japanese yen,” Galpin said. He said that, despite the European debt crisis, the department expected to work on 310 projects this year. Japan might overtake Britain as the third-biggest source of investment in the coming year, Galpin said, as many family-owned, medium-sized companies from Japan are investing outside the country for the first time. They include restaurant chains, retailers and other service-related companies. The InvestHK director said he remained “cautiously optimistic” about the outlook in Europe and does not expect a drop in the number of European companies seeking to do business here. This view is based on the number of firms that have already expressed interest, he said.

Shares of Hang Lung Properties (SEHK: 0101) jumped on Thursday after it reported increased operating profits and said it expects leasing profits from China soon to surpass those from Hong Kong. Shares in the company were up 6.8 per cent in late afternoon trade, the top performer among the property and construction stocks listed in Hong Kong, with the Hang Lung Group (SEHK: 0010) up 6.5 per cent. The Hang Seng properties and construction index was up 3.5 per cent. Hang Lung Properties said that underlying net profit for the six months through December last year rose 29 per cent to HK$1.65 billion, on turnover of HK$3.1 billion. The Hang Lung Group similarly saw underlying net profit for the half-year period rise 27 per cent to HK$1 billion. The companies have changed their fiscal yearend to coincide with the calendar year, from June. They are the first Hong Kong-listed property developers to declare last year figures. Hang Lung Properties, the fifth biggest Hong Kong-listed developer by market capitalisation, owns office buildings and shopping malls, currently draws 48 per cent of its leasing profit from mainland China properties and 52 per cent from Hong Kong. Profit from China should overtake Hong Kong soon, with Hang Lung planning to open one shopping centre per year in coming years in the mainland, Ronnie Chan, chairman of Hang Lung Properties and Hang Lung Group said at a news conference. Chan has said he is a “bear hugger” and keen to buy land in second-tier cities as the China property market slows. But he declined to give a forecast of how much cash the company might spend this year. “I may not be able to meet the target, so why have a target?” he said. “We prepare ourselves well financially.” Bank lending in China started getting easier in October, Chan said, but it is not clear whether the mainland property market has hit its trough. “The central government has loosened the pressure on the controls, but now it is not clear if the effect is good for developers or not,” Chan said. Hang Lung management said the dividends for the two companies will remain at a level similar to last year’s. Swire Properties started trading on Wednesday at a discount to its net asset value that was similar to the 40 per cent discount shown by competing landlords such as Hang Lung Properties and Hongkong Land. But Chan said he was not concerned about the market’s valuation. “We used to trade at a premium for many years, and in the last year or so we have been trading at a discount,” he said, adding that he would “go insane” if he lived or died by the whims of investors. With market movements, “we do watch them, but we don’t take it to heart too seriously,” Chan said.

The World Health Organisation nominated Hong Kong's former health chief Margaret Chan to a second term as Director-General of WHO on Thursday. The World Health Organisation on Thursday nominated its current chief Margaret Chan Fung Fu-chun for a second term at the head of the UN agency. Director-General Chan was the only candidate put forward to the WHO’s executive board who made the official nomination at a meeting in Geneva. The appointment must be approved at the 65th World Health Assembly, scheduled to meet in the city from May 21-26. “If confirmed by the World Health Assembly, Dr Chan’s new term will begin on July 1, this year and continue until June 30, 2017,” WHO said. Chan, Hong Kong's former health chief, was elected to the WHO’s top post in November 2006. During her Hong Kong tenure the city dealt with the world’s first outbreak of the deadly H5N1 bird flu virus as well as an outbreak of Severe Acute Respiratory Syndrome (Sars). And in 2009, during her time at the helm of the WHO, Chan declared swine flu the world’s first flu pandemic in 40 years. 

Hong Kong Exchanges and Clearing (SEHK: 0388) Limted (HKEx) plans to set up a joint venture with the Shanghai and Shenzhen bourses this year for trading futures products with underlying assets in mainland China, HKEx Chief Executive Charles Li said on Thursday. Li made the remarks at a briefing with reporters in Hong Kong. HKEx said in August that it was in talks with peers in Shanghai and Shenzhen on a joint venture for equity derivatives and index compilations, a move that would represent the first concrete link between the three exchanges focused on China’s vast economy. Li also said on Thursday the HKEx planned to ramp up spending to upgrade infrastructure in the commodities space and confirmed its commitment to deeper ties with its mainland peers. HKEx said capital expenditure this year would be about HK$2 billion (US$257.70 million), although it later clarified that this would be spread over a number of years, expanding into areas like commodities and fixed income. “We are coming to a moment when China will become so international, but are frustrated that they cannot manage the commodities sector on their terms,” Li told themedia briefing. “If we can tap into this, we can grow into it.” He reiterated plans to set up a joint venture with the Shanghai and Shenzhen bourses this year for trading futures products with underlyling assets in the mainland. Mainland investors will one day be able to take part in yuan-denominated IPOs or share sales, Li said, following further moves by Chinese regulators aimed at promoting the city as a yuan hub. Li said on Thursday that letting mainland Chinese invest in a stock offering at the same time as other investors would eliminate the risk of a price bubble and was the most “politically feasible” method. One mainland regulatory official said earlier this week that the country would loosen restrictions to encourage mainland companies to hold yuan stock listings in Hong Kong. HKEx said in August that it was in talks with peers in Shanghai and Shenzhen on a joint venture for equity derivatives and index compilations, a move that would represent the first concrete link between the three exchanges focused on China’s vast economy. China’s IPO market last year, worth 286 billion yuan (US$45.31 billion), was the biggest in the world. Hong Kong’s IPO market raised 220.7 billion yuan during the same period, while the US market was worth 224.3 billion yuan, according to accounting firm PricewaterhouseCoopers.

Feng Shui Analysis Foresees Volatility in Year of the Dragon - Philip Chow (C), CLSA’s research analyst, along with research associate Mariana Kou (L) and institutional salesperson Emily Lam display the CLSA Feng Shui Index during a news conference in Hong Kong January 18, 2012. One might expect the Year of the Dragon, which kicks off next week, to be a lucky time for investments. But that’s not necessarily the case, according to this year’s edition of the Feng Shui Index released by Hong Kong-based brokerage firm CLSA. The index, which applies traditional Chinese astrology to market forecasting, predicts a volatile year (pdf). Though the Year of the Dragon is traditionally considered auspicious, there are likely to be countervailing forces at work, CLSA says. The reason: This particular dragon year is associated with water, which is far less lucky for investing than other elements like fire and metal. The index predicts a positive end to the year, especially in October and November, when the metal element dominates. CLSA is clear that their Feng Shui Index is meant to be “tongue-in-cheek,” and issues several disclaimers such as this one: “To be fair, feng shui’s original purpose was to locate auspicious burial spots, not call the twists and turns of the equity markets or individual sectors.” The authors of the report also admit that they got last year badly wrong. The Year of The Rabbit was supposed to be especially good for playing the markets. “Lots of luck, if the Rabbit’s reputation is any guide,” they wrote a year ago (pdf). “And best of all for investors, indirect wealth such as market-made moolah will be the order of day.” It didn’t turn out that way. The S&P 500 in the U.S. was essentially flat in 2011, while Hong Kong’s benchmark stock index, the Hang Seng, fell by over 19%. At least one prediction from last year turned out well: CLSA said that Kim Jung-un, based on his “water dog” astrological sign, would have a great year. That’s true, if you consider stepping into his father’s shoes to lead North Korea to be positive for him. This year, Chinese Vice President Xi Jinping, a “water snake,” is tipped by CLSA to have just a “fair” year, but his horoscope apparently calls for a “job opening” in autumn. That seems like a shoe-in: Mr. Xi is universally expected to become China’s next top ruler during the Communist Party Congress in October or November.

 China*:  Jan 21 2012 Share

A shopper looking at clothing and accessories at a Chloe shop in Shanghai. The Ministry of Commerce predicted that China would become the largest luxury goods market by 2014. Deng Li, a graduate student in the United States, runs an online shop as an agent selling luxury goods she buys from abroad. "Since there are three holiday breaks a year in my college, I can take the opportunity to purchase dozens of luxury items and sell them to domestic customers," said the 22-year-old Beijinger, who has been studying in the US for four years. Deng is not unique. Purchasing agencies became an emerging business for foreign luxury brands with transaction volumes hitting 12 billion yuan ($1.89 billion) in 2010, excluding items bought for friends and relatives, according to a report by China E-commerce Research Center. Deng charges 3 to 5 percent of the price as commission for each item. She puts photos of the latest items online for each season. Her online shop has seen a surge in orders for luxury goods in the past two years. In 2009, Deng found a business partner, a Chinese-British whom she uses on business trips to Paris. "The purchased brands are mainly British and French, as he is often commuting between London and Paris," Deng said, adding that a limited number of US and Italian brands were also among the targets. According to industry insiders, the boom the business is enjoying is mainly driven by the large price gap of the items between the Chinese and overseas markets. "The gap ranges from hundreds of yuan to thousands of yuan," Deng said, adding, "For some items, the gap is as much as 10,000 yuan to 20,000 yuan." According to the Ministry of Commerce, for 20 luxury brands ranging from watches to wines, the prices on the Chinese mainland are 45 percent higher than in Hong Kong, 51 percent higher than in the US and 72 percent higher than in France. High taxes imposed on imported luxury goods are the main culprit behind the high prices. For luxury goods, 6.5 percent to 18 percent goes to the tariff, 17 percent is levied for value-added tax, and 30 percent goes on consumption tax. Ouyang Kun, chief of the World Luxury Association's China office, said many countries don't impose tax on luxury goods so the prices there are low. "China levies higher taxes on those goods," said Ouyang, indicating that some types of taxes overlap. A report on the luxury goods market in China released by Bain & Co showed that luxury suppliers earned 68.4 billion yuan from Chinese consumers last year, with combined spending on cosmetics, perfume and healthcare products totaling 16.9 billion yuan, followed by 15.5 billion yuan on watches. Another report released by the Research Center for Luxury Goods and Services at the University of International Business and Economics (UIBE) last month showed that only one third of the purchases took place on the Chinese mainland. The developed markets saw 58 percent of the transactions in Europe, compared with 28 percent in the US and 8 percent in Japan, the report added. It is estimated that overseas purchasing agencies and consumption caused a loss of 2 billion yuan a year in taxes for China's fiscal revenue, a sum that has forced the government to mull an adjustment in the taxing of luxury goods due in the burgeoning market for such products. Yao Jian, former spokesman for the Ministry of Commerce, said in June that China would lower tariffs for imported luxury goods but did not disclose by how much. The Bain & Co report also estimated that the Chinese market for luxury goods would grow at a pace of 20 percent to 35 percent annually over the next five years. The Ministry of Commerce predicted that China would become the largest luxury goods market by 2014, accounting for 23 percent of the global market. The UIBE report also pointed to the potential for growth in markets in second- and third-tier cities. It said that sales of luxury goods in Hangzhou, Shenyang, Chengdu and Qingdao would account for 8 percent, 6 percent, 5 percent and 3 percent of the country's total, with these cities being the main markets for competition between luxury brands. "Markets in first-tier cities such as Beijing, Shanghai and Guangzhou are highly mature," said the report. But it said for the lower-tier cities, the limited marketing and promotional activities and sales channels would challenge the expansion of luxury brands. However, e-commerce services selling the brands would make up the gap.

World's tallest ride opens in Guangzhou - The world's tallest ride, at a staggering 484 meters high with a 30 meter drop at 80 km per hour, opens to the public in Guangzhou, South China's Guangdong province Jan 18, 2012.

Models present creations by Hong Kong's designer Eliza Yeung as part of her Fall/Winter 2012 during Hong Kong Fashion Week Jan 18, 2012. Hong Kong Fashion Week, which lasts till January 19, features about 1,900 exhibitors from 26 countries and regions. A model presents a creation by Indonesian designer Marilena Vlataki during Hong Kong Fashion Week for Fall/Winter 2012 in Hong Kong Jan 18, 2012.

Hong Kong*:  Jan 20 2012 Share

In the city that created the dim sum bond, where food and money are two overriding passions, the biggest battle in the financial community isn't about job cuts or billion-dollar IPOs. It's about lunch. The spiritual leader of the dispute is a tiny 80-year-old stockbroker wearing a black fur coat and carrying a leopard print handbag. She says she is fighting against the city's wealthy, entrenched elite. At issue is the length of the lunch hour at the Hong Kong Stock Exchange. The exchange, the world's leader in IPOs the past three years, wants to reduce its lunchtime trading break from 90 minutes to one hour. Until last year, the break lasted two hours. "Lunch is a habit of Chinese people," says the protest's matriarch, Choi Chen Po-sum. "Foreigners are different. They can have a big breakfast and forgo lunch." No major Western stock exchange has a midday break. While some Asian exchanges still cling to the tradition, Singapore's stock exchange scrapped lunch last year, and Tokyo trimmed the halt to one hour from 90 minutes. The New York Stock Exchange gave up its midday trading break in 1871, four years after the first stock ticker brought live prices to investors. A London Stock Exchange spokesman said he could "find no record of a formal lunch break in modern times." But, given that there has been trading in London since 1698, "there may have been at some point, but it would be very difficult to find that out." For brokers in Hong Kong, lunch is sacrosanct. "Lunch also isn't just for eating," Mrs. Choi said. "It's also when Hong Kong brokers go out and find clients. That's the only way they can get new business and make commissions." Mrs. Choi, who is the Life Honorary President of the Institute of Securities Dealers, was one of Hong Kong's first women brokers when she started in the 1970s. "I wanted to work but didn't want to do anything that was too physically taxing, nor did I have any professional qualifications," she says. Her opponent in the battle over the lunch hour is Charles Li, chief executive of Hong Kong Exchanges & Clearing Ltd., who has been pushing to modernize the exchange with new technology and products. The former journalist understands that change can be bitter but argues that the city can't afford such luxuries in an increasingly competitive world. The exchange is urging brokerages to better manage their resources, perhaps by rotating employees' lunch breaks to cope with the new schedule. The feud highlights a split in Hong Kong's financial community. While the world's biggest banks occupy dazzling skyscrapers in the city's Central District, many stockbrokers work in storefront offices in crowded neighborhoods where their often elderly clients spend the day aggressively trading stocks and socializing. Brokers argue that the exchange's reforms will only benefit the big banks' brokers and that cutting lunch means they can't spend time with their fast-trading clients who want to discuss the morning trading session and strategize for the afternoon. "Now that they don't have this break in the day, even the clients are unhappy," said Ruann Cheung, 48, who has been a broker for more than 20 years. "Also, does the stock exchange expect investors not to eat lunch?" The fight spilled out into the street last week when brokers marched on the exchange. One protester held an iPad aloft with a picture of Mr. Li with his face crossed out, and others derided him as the dictator of Hong Kong's monopoly exchange. Some smashed porcelain rice bowls to symbolize the threats to their livelihood. Ms. Cheung and a few of her fellow brokers from Lippo Securities Ltd. held placards that said, "To HKEx: You want us to trade till we drop; we want you to drop before we trade!" They said one of their clients came up with the slogan and encouraged them to protest. The protest began across the street from the Asia headquarters of HSBC, where a group of Occupy Hong Kong protesters—an offshoot of Occupy Wall Street—have been camped for months. The two groups remained unaffiliated, but Iris Yau, a high-school student who said she spends four to five nights a week sleeping at Occupy Hong Kong, sympathized with the brokers. "Just because they are rich, it doesn't mean they agree to being exploited," she said. Among the marchers protesting the stock exchange were restaurant workers including Jacky Choi, a deputy manager at Treasure Lake Golden Banquet, a dim sum hall that serves hundreds of dumplings to brokers during their lunch break. He said revenue at lunch fell by as much as one-third after the lunch hour was shortened. The brokers in Hong Kong do have one advantage over their brethren abroad—they work sitting down. Still some say working without a break in trading will be too much. "Our work is mainly using our brain. After a long time of working, our brain will be stuck," said Joseph Wong, a broker at Delta Asia Securities Ltd. The marchers reached the stock exchange and chanted for Mr. Li to come out. He emerged and stood awkwardly with several other exchange executives in the middle of the crowd to accept their letter of protest. Some brokers say that even if the lunch intermission is shortened, brokers won't trade during the new hours. Last year the break, which had run from noon to 2 p.m., was cut by 30 minutes, but trading volume hasn't increased. "The fact is, no trading is happening from 1:30 to 2…we are sitting around doing nothing," said Jojo Choy, chairman of the Institute of Securities Dealers. "There is no market efficiency at all."

An employee at FAW Group Corp's factory in Johannesburg, South Africa. The Ministry of Commerce says it encourages Hong Kong and mainland businesses to go abroad to enter international markets, especially markets in developing countries and regions. Closer trade relations with the mainland can mitigate the harm posed by the global economic slowdown to Hong Kong's highly open economy. The downturn and slowing of trade "will surely affect the economic growth of Hong Kong, a relatively open economy that relies greatly on overseas demand," said Shen Danyang, spokesman for the Ministry of Commerce, at a news conference on Wednesday. He said the best way to respond to the situation is to strengthen trade cooperation between Hong Kong and the mainland. "The ministry encourages businesses from Hong Kong and the mainland to go abroad to enter international markets, especially markets in developing countries and regions," Shen said. Hong Kong "can take full advantage of the free trade in goods with the mainland and sell more products to the domestic market, which will partly compensate for exporting fewer goods to other destinations", he said. In November, the value of Hong Kong's exports declined 3.6 percent year-on-year, and its exports to the US dropped by 18.3 percent from a year before, according to statistics released by Hong Kong's Census and Statistics Department on Tuesday. Jiang Yaoping, vice-minister of commerce, said on Tuesday that promoting trade cooperation is a key part of 36 policies announced by Vice-Premier Li Keqiang during his visit to Hong Kong in August. "Hong Kong has become an important avenue for mainland businesses that want to go abroad to tap international markets," Jiang said. "It has advantages in financing, trade, law, accounting and investment consulting and the prospects for exploring international markets together look very promising." Wang Haifeng, director of the International Cooperation Center affiliated with the National Development and Reform Commission, said "the essential thing is to combine the mainland's advantages in manufacturing and Hong Kong's superiority in the services industry to develop comprehensive competitive strength, so that businesses will be able to move into international markets and build up their brands as well as sales networks." Wang said mainland businesses should set up branches in Hong Kong before they explore international markets, as many countries have tightened the requirements they impose on foreign investment during the current slowdown. In 2011, China's outbound direct investment increased by 1.8 percent from a year earlier to reach $60.07 billion, according to the ministry. In addition to the sluggish economy leading to reduced investments, "some countries have placed limits on foreign investors, especially foreign State-owned enterprises, which pose risks to Chinese enterprises that are looking into international markets", Shen said, Even so, Shen said the mainland's import demands "will surely expand during the 12th Five-Year Plan (2011-15). And the (Hong Kong) special administrative region can promote the sale of goods produced in Hong Kong - as well as processed goods imported from other regions - to the mainland market". The value of retail sales on the mainland will increase by 15 percent annually during the 12th Five-Year Plan and reach 32 trillion yuan in 2015, according to the ministry.

Dolce & Gabbana Apologizes for Photo Spat - Protesters gathered outside a Dolce & Gabbana store in Hong Kong on Sunday. The company subsequently apologized for a dispute tied to photo-taking outside its store. Dolce & Gabbana finally said sorry to Hong Kong. The Italian luxury brand sparked controversy earlier this month when local citizens, snapping photos of the store from the street, were told to stop, while others from China and other foreign countries weren’t. Local media recorded the store’s security staff enforcing the policy, triggering accusations of discrimination against Hong Kongers in favor of the wealthy mainland-Chinese tourists who keep such stores in business. More than 1,000 protesters outside Dolce & Gabbana’s store in Kowloon forced it to close early Jan. 8, and the topic simmered online as well, with commenters debating on news articles, blog posts and D&G’s Facebook page. As Chinese New Year — a critical shopping season in Asia — drew near, Dolce & Gabbana issued a formal apology. “We understand that the events which unfolded in front of the Dolce & Gabbana boutique on Canton Road have offended the citizens of Hong Kong, and for this we are truly sorry and we apologise,” it said in a statement posted to the store’s windows on Tuesday. “The Dolce & Gabbana policy is to welcome the Hong Kong people and that of the whole world respecting the rights of each individual and of the local laws.” For Hong Kongers, it was a hard-fought apology that wasn’t forthcoming after the Jan. 8 protest. (At the time, it said “We wish to underline that our company has not taken part in any action aiming at offending the Hong Kong public.”) Protesters demonstrated again last Sunday, with several people taping posters outside the store saying “Apologize or get out,” according to news reports. China’s growing wealth has been a boon to Hong Kong’s luxury sector, as mainland consumers flock to the city’s lower-taxed shopping outlets. But the photo controversy fanned complaints that rich mainlanders get favored treatment in Hong Kong. Even after the apology (which was taken down from the Canton Road store by Wednesday), the sentiments persist. “We are not idiots,” one commenter wrote on Dolce & Gabbana’s Facebook page. “We fully understand your purpose of your ‘apology’. You don’t really care about [Hong Kong] people. You just don’t want to lose the turnover from the mainland (Chinese) tourist during the Lunar New Year holiday.”

 China*:  Jan 20 2012 Share

China has succeeded because for China to develop economically is that you must have good relations with other countries. Foreign policy pragmatism 'still a force' - Late paramount leader Deng Xiaoping's legacy of pragmatism in foreign policy is still influential despite hawkish calls for China to flex its military muscle on the world stage, a China expert who recently published a biography of Deng said yesterday. "He very strongly felt that the important thing for China to develop economically is that you must have good relations with other countries," Professor Ezra Vogel (pictured), emeritus professor of social sciences at Harvard University, said at the Chinese University of Hong Kong. "One of the lessons is that China has succeeded because of that policy." The university will publish the Chinese-language version of Vogel's book Deng Xiaoping and the Transformation of China in May. Facing international isolation in the early 1990s, China was struggling to emerge from the shadows of the Tiananmen crackdown. Deng then touted the idea of his taoguang yanghui (lie low) policy, which advised building economic rather than military strength - and that remains the guiding principle in China's foreign and security affairs. Countering many Western scholars' criticism that his book takes an apologist view of the Tiananmen crackdown in 1989, Vogel said Deng's order to suppress the pro-democracy movement and the subsequent stalling of political reform should be viewed from the perspective of Deng's experience of political turmoil and instability in his early life. Deng lived through the civil war between the Communists and Kuomintang in his youth. "He was afraid the place would fall apart," Vogel said, adding that Deng at first supported liberalisation efforts by his subordinates Hu Yaobang and Zhao Ziyang in the mid 1980s, until he considered the situation "too tough". "[I became] somewhat more sympathetic with him in his efforts to keep order, although I was very upset at the shooting in Beijing in 1989," Vogel said. "I think it's easier to understand his position and why he felt he had to do that. As an author I had to explain what he did and why he did it."

Vice-Premier Li Keqiang meets former US secretary of state Henry Kissinger on Tuesday at the Great Hall of The People in Beijing. Kissinger led a delegation of prominent former diplomats attending the China-US Track Two High-Level Dialogue. Vice-Premier Li Keqiang met former US secretary of state Henry Kissinger in Beijing on Tuesday, urging the two countries to properly settle differences in bilateral relations and promote the healthy growth of ties. It followed Vice-President Xi Jinping's speech on Monday commemorating 40 years since US president Richard Nixon made his historic trip to China in 1972. "Under the new circumstances, the two countries should build a cooperative partnership featuring mutual respect and benefit to strengthen trust, expand common ground and properly handle differences, in an effort to facilitate the healthy and stable growth of bilateral ties," Li told Kissinger. Kissinger and his delegation came to Beijing for the third meeting of the China-US Track Two High-Level Dialogue, a gathering for dozens of prominent retired diplomats and officials from both countries. In the West, track-two diplomacy refers to non-official dialogue often involving academics and think tanks. The purpose of the dialogue is to enhance communication and educate the public on foreign policy, according to Sun Zhe, a professor on US politics at Tsinghua University. Former Chinese state councilor Tang Jiaxuan and Kissinger led the two sides in the dialogue. The US delegation included former secretary of state George P. Shultz, former secretary of the treasury Robert Rubin and former US chairman of the joint chiefs of staff Michael Mullen. These former officials have administrative experience and possess a deep understanding of China-US relations. Compared to officials still in office, they are less strained by domestic politics and can engage in more candid conversations, according to Qu Xing, president of the China Institute of International Studies. Since the release of the Shanghai Communique 40 years ago, the two countries have pushed forward relations despite twists and turns, Li said. "China-US relations have become one of the most important and energetic bilateral ties in the world," Li said. In the face of increasing interdependence among countries, Li said the two countries should achieve win-win and all-win situations through cooperation. China and the United States are highly compatible in their cooperation, the vice-premier said, urging both sides to create a fair, equal and transparent environment, and expand cooperation in trade, investment, and alternative and clean energies. Li also called on both countries to enhance cultural exchanges to cement mutual understanding and consolidate the social basis for bilateral friendship. He expected the retired US officials to play a positive role in strengthening bilateral ties. "These officials will surely brief the current administration when they return home. Besides, some US officials, like Kissinger and Shultz, who worked in think tanks, will influence public opinion through their organizations," Qu said. The China-US Track Two High-Level Dialogue mechanism was launched in Beijing in October 2009. The previous two meetings were held in Beijing and Washington in 2009 and 2010, respectively.

A Burberry Group PLC store in Beijing. Burberry's comparable store sales increased by 13 percent year-on-year during the three months ended Dec 31, 2011. Angela Ahrendts, chief executive officer of Burberry Group PLC, was named as one of Forbes' 100 Most Powerful Women in the World four times in the past five years. In 2010, her name also appeared on the list of Fortune's Businesspeople of the Year, the Financial Times' Top 50 Women in World Business, and she was awarded the Outstanding Leadership Award at the Oracle World Retail Awards in 2009. The key for the success, Ahrendts said, is that she doesn't think about herself. "It is not about me. It is about the company. I tell everyone in the company, 8,000 employees, don't do it for me or Christopher (Chief Creative Officer Christopher Bailey). Always do the best for the brand," she stressed. "The Burberry brand has been around for 155 years. Our job is to keep the brand relevant, modern and strong, so it will stay around for another 155 years. The brand will outlive anyone of us. "I do not think of me or my success. My success is the company's success. If the company does well, then Angela gets into the magazine. If the company does not do great, then Angela is nothing." Ahrendts became the CEO of Burberry on July 1, 2006. Under her leadership, Burberry has entered the FTSE 50 and has seen annual revenues almost double to 1.5 billion pounds for the year ended March 31, 2011. Despite the slowdown in the global economy, Burberry achieved record performance. According to the company's third-quarter report, comparable store sales increased by 13 percent year-on-year during the three months ended Dec 31, 2011, and retail revenues were up 22 percent as compared with the same period of 2010. The reason for the growth, according to Ahrendts, is largely because of Burberry's focus on investing to drive growth and executing innovative strategies in product design, digital marketing and retail. "We spend 60 percent of our marketing budget in digital, as we feel very strongly that digital is the new universal language," said Ahrendts, adding this is also the same in China. Looking across the world, in all the high-growth markets such as China, India, Turkey and Latin America, the average high net-worth individual is 15 to 20 years younger than in developed markets. "So if they are younger, they are digital, they have a smart device and they are living on that device. That is their language. So, as a brand, if that is the customer that we are targeting, we had better speak their language," she explained. Burberry's strategies in China are no different from what the company does in other markets. It has the same products and the same content. "But we have to market the products to the consumers in a different way and work with different partners in China," Ahrendts said. Instead of YouTube, the company puts Christopher Bailey and Burberry Acoustic on Youku. Instead of Twitter or Facebook, the company uses Sina Weibo and other local social media sites. According to Ahrendts, Burberry has 5.8 million impressions on Youku, and 308,000 fans on Sina Weibo. However, investing heavily in digital for Burberry is not just about promoting online shopping, she added. "Online is a way for us to connect with our consumers, to engage and to entertain." For most of the luxury businesses, around 60 percent of the consumers shop online but want to buy in-store. "So we say, Burberry World, our website, is our number one marketing opportunity. We have more than a million people come to Burberry World every week," she said. More flagship stores. So far, Burberry has about 60 stores in around 30 cities in China. Most of the stores are located in first-tier cities, including nine in Beijing, five in Shanghai and eight to nine in other tier one cities. "We are still investing heavily in the big flagship markets in China. In the next three years or so, we will have around 100 stores in China. But that's net, because every year, the market is evolving in China. With all the big developments, we are closing some of the smaller and older stores and opening 10 to 15 flagship stores each year," said Ahrendts. Although some luxury brands are expanding into China's smaller cities, betting on the potential of the consumption power in these cities, Ahrendts said Burberry intend to focus on the 30 cities that the company is already in, in line with its global focus on flagship markets. "We may open one to two 3,000 square feet flagship stores in one of those tier two cities. We are not aggressively going beyond the 30 cities we are already in," said Ahrendts. "In fact, we are already more widely distributed than most of the luxury brands in China," she added. According to Ahrendts, Burberry manages its investments on a regional basis. "The region receiving the most money is definitely Asia. China is definitely one of the top three markets globally where we are spending this year," she said. Besides China, Burberry has also invested in London this year in preparation for the London Olympics. The United States is also one of the key markets for the company.

The double standard of US politics while protesting on China's web policy did the same to its own people - Wikipedia, Google launch online piracy protest - Wikipedia went dark, Google blotted out its logo and other popular websites planned protests on 18 January 2012 to voice concern over legislation in the US Congress intended to crack down on online piracy. Wikipedia went dark, Google blotted out its logo and other popular websites planned protests on Wednesday to voice concern over legislation in the US Congress intended to crack down on online piracy. Wikipedia shut down the English version of its online encyclopaedia for 24 hours to protest against the Stop Online Piracy Act (SOPA) introduced in the House of Representatives and the Senate version, the Protect IP Act (PIPA). Google placed a black box over the logo on its much-visited US home page to draw attention to the proposed laws, while social news site Reddit and the popular Cheezburger humour network planned to shut down later in the day. The draft legislation has won the backing of Hollywood, the music industry, the Business Software Alliance, the National Association of Manufacturers and the US Chamber of Commerce. But it has come under fire from digital rights and free speech organisations for allegedly paving the way for US authorities to shut down websites accused of online piracy, including foreign sites, without due process. “For over a decade, we have spent millions of hours building the largest encyclopaedia in human history,” Wikipedia said in a message posted on its darkened website. “Right now, the US Congress is considering legislation that could fatally damage the free and open internet. For 24 hours, to raise awareness, we are blacking out Wikipedia.” The founders of Google, Twitter, Wikipedia, Yahoo! and other internet giants said in an open letter last month the legislation would give the US government censorship powers “similar to those used by China, Malaysia and Iran”. “We oppose these bills because there are smart, targetted ways to shut down foreign rogue websites without asking American companies to censor the internet,” a Google spokesman said on Tuesday. “So tomorrow we will be joining many other tech companies to highlight this issue on our US home page,” the spokesman for the internet search giant said. Reddit said it will shut down for 12 hours – from 8am to 8pm – to protest the legislation. “We wouldn’t do this if we didn’t believe this legislation and the forces behind it were a serious threat to Reddit and the internet as we know it,” the company said. “The freedom, innovation, and economic opportunity that the internet enables is in jeopardy.” Ben Huh, the founder of Cheezburger network, said on his Twitter feed that his 58 sites, which include, FAIL Blog and The Daily What, will observe a black out on Wednesday. Wikipedia founder Jimmy Wales announced the plans to shut down the site in a message on his Twitter feed. “Student warning! Do your homework early. Wikipedia protesting bad law on Wednesday!” Wales said. “This is going to be wow. I hope Wikipedia will melt phone systems in Washington on Wednesday. Tell everyone you know!” he said. Volunteer-staffed Wikipedia turned 11 years old on January 15 and boasts more than 20 million articles in 282 languages. The White House expressed concern about the anti-online piracy bills in a statement over the weekend. “While we believe that online piracy by foreign websites is a serious problem that requires a serious legislative response, we will not support legislation that reduces freedom of expression, increases cybersecurity risk, or undermines the dynamic, innovative global internet,” it said. “Any effort to combat online piracy must guard against the risk of online censorship of lawful activity and must not inhibit innovation by our dynamic businesses large and small,” the White House said. News Corp Chief Executive Rupert Murdoch, who backs the US legislation, accused the “blogosphere” of “terrorising many senators and congressmen who previously committed” to supporting it. “Nonsense argument about danger to internet. How about Google, others blocking porn, hate speech, etc? Internet hurt?” he wrote on the popular micro-blogging website.

Li Na wins second round at Australian Open - Li Na of China won her second round women's singles match against Olivia Rogowska of Australia during 2012 Australian Open tennis championship in Melbourne.

A vendor arranges toy dragons at a market in Beijing yesterday. China's retail sales rose 18.1 percent annually to an 11-month high in December as economic growth eased to a still robust 8.9 percent in the last quarter of 2011. CHINA'S retail sales rose 18.1 percent annually to an 11-month high in December, bolstered by robust demand in the run-up to the new year and the Spring Festival. Retail sales climbed from a year earlier to 1.77 trillion yuan (US$281 billion) last month, the National Bureau of Statistics said yesterday. For last year retail sales grew 17.1 percent. In November they rose 17.3 percent annually. "People's spending has seen a stable growth last year thanks to their rising disposable income and China's improving social welfare," said Ma Jiantang, the bureau's head. Last year, urban residents saw their disposable income jump 14.1 percent from a year earlier to 21,810 yuan, while that of rural dwellers gained 17.9 percent to 6,977 yuan. Ma added consumption will rise rapidly in future as China's vast urbanization continue to drive the country's economy.

Travelers wait to get boarding passes at the Beijing Capital International Airport today. The airport will handle a record 34.88 million air travelers during the 40-day Spring Festival travel rush, a rise of 7 percent from a year ago, aviation authorities estimated.

Dragon stamps issued by Canada (top), France (bottom left), and New Zealand (bottom right), to celebrate the upcoming Chinese New Year. Postal authorities around the globe bring out commemorative issues to celebrate Chinese New Year There are a thousand Hamlets in a thousand people's eyes. The same can be said about the dragon, an imaginary creature in Chinese and Western culture. It can be demonstrated no better than in the variety of dragon stamps issued by nearly 20 countries and regions to celebrate the Chinese New Year. For example, Japan features four cute dragon toys on its stamps. It also featured the Chinese character "dragon" in 10 different calligraphic styles by 10 famous calligraphers. South Korea's dragon stamps depict a cartoon dragon embedded in snowflakes. The United States, the first country to issue a dragon stamp in 2012, features a vibrant dragon head wielded in a traditional dragon dance. Combined with the style of Chinese paper-cutting, it is a celebration of Chinese folk culture. The stamp issued by France features the traditional royal golden dragon and Chinese characters. All of these were in stark contrast with the image presented by China Post. It looks ferocious with its fierce stare and wide-open mouth, which prompted a heated online debate. "It is roaring and intimidating," a blog post read. But experts said it was actually a design that was close to China's first stamp, issued in 1878, during the Qing Dynasty (1644-1911). Chen Shaohua, the designer of the new stamp, defended his work, saying the dragon should not be too gentle, otherwise it does not match the Dragon in traditional culture that was used to exorcise evil spirits, avoid disasters and bless people. "The dragon is the deity of the 12 animals in the Chinese zodiac, and you can't modernize it like a cartoon," said Chen. All the different interpretations are a reflection of different cultures in a globalized world, according to stamp experts. "With stamps, the first thing I can see is the culture, the design," Canadian philatelist Daniel Wong was quoted by Xinhua as saying. "When you see the stamp you see the history too. There's a lot of information in a stamp." "A dragon represents something out of medieval times with castles and moats and knights in the Western context," said Wendy Fung, a 25-year-old US citizen who works for a multinational company in Beijing. "But having lived in China for some time now, I know that it also represents power, authority and divine royalty. So it totally made sense to me when I saw the dragon on China's stamp," she said. The countries like Singapore, Canada, New Zealand, Slovenia and the United Kingdom also issued or plan to issue their own dragon stamps.

Danmei Nina Wu (above and top right) infuses culture and art in her Chinese language instruction at Medgar Evers College Preparatory School in New York. Confucius program is growing in popular appeal, David Lariviere reports from a New York class. Danmei Nina Wu's sixth-grade class, at 8:55 on a bright morning, seemed more like musical theater than language learning. There was rhythmic chanting and loud clapping. Three students stood at the front of the smallish classroom holding the Chinese flag and sang the Chinese national anthem. Sign language was prominent, and a spirited ribbon dance was performed. Finally, for the showstopper, all 25 students formed a semicircle and performed the school song with great pride and joy. And not a word of English was spoken. "Nu li xue hao zhong wen, shi wo men de li xiang. Mei ge ai wo zhong wen ban ya, kuai le de da jia ting." The English translation is: Learning Chinese successfully is our dream. MECPS Chinese class, happy big family. And these were 11-year-old African-Americans in Brooklyn, New York, attending Medgar Evers College Preparatory School led by Michael Wiltshire, the principal, and Jean Adilifu, assistant principal for foreign languages. About 30 percent of the 1,100 students in grades 6 through 12 take a Chinese class, and some take six years with Advanced Placement offered. "It's the largest number of students of African-American heritage, under one roof, taking sustained Chinese language instruction in the country," Adilifu said, beaming. To say the students are motivated is an understatement. "From the sixth grade, I always said I wanted to be a neurosurgeon," said senior Sadiki Wiltshire, the principal's son. "As the years progressed, I still wanted to, but I realized it would be better if I extended my network to not just America but all over the world. "Because of my love for Chinese, I realized that I love languages, period. When I go to college I want to study Russian, Korean and Japanese. When you break the language barrier, there's nothing you can't do," he said. "You can do anything." Young Wiltshire, now an AP scholar with distinction, was one of the first Medgar Evers students required to take Chinese in the sixth grade. Six years later, he already has college credits and is looking at attending Ivy League universities such as Harvard, Penn, Yale and Princeton. Spanish and French are the other options once the students reach the ninth grade, but students can continue with Chinese if they wish.

Hong Kong*:  Jan 19 2012 Share

A teller displays 100-yuan notes at the Bank of Taiwan head office in Taipei. Taiwan has allowed its banks to trade in the mainland currency since June, 2008. New issues of dim sum bonds in Hong Kong are expected to double or triple this year to as much as 200 billion to 300 billion yuan (HK$246 billion to HK$369 billion), according to HSBC Corp Hong Kong chief executive Anita Fung Yuen-mei. It is being driven by growing demand and Beijing's moves to broaden use of the yuan overseas. Fung's bullish outlook for the offshore renminbi market, delivered in a speech yesterday at a Hong Kong government forum, includes a projection that yuan-denominated Hong Kong stocks will account for 15 per cent of the local market's total capitalisation within five years. That would mark a dramatic increase from just 0.1 per cent at present, as represented by Li Ka-shing's Hui Xian REIT, the only yuan-denominated listing in Hong Kong. Dim sum issues, or yuan-denominated bonds sold in Hong Kong's offshore market for the mainland currency, rose to 87 new offerings last year that raised 106 billion yuan, up from 36 billion yuan in 2010, Hong Kong Monetary Authority chief executive Norman Chan said yesterday. But while demand among offshore issuers for comparatively cheap yuan-denominated funding appears to be large and growing, the bonds haven't been such a great bet for those investing in them. The Bank of China (Hong Kong) Offshore RMB Bond Index, which measures total returns, has in recent months recovered from its early October lows. But at 96.67 points as of yesterday, it was down about 4 per cent from a year ago. Turnover in the secondary market for offshore yuan bonds also remains weak. As a result, substantial gaps exist between the offer and asking prices for the bonds—even for issuers such as the Ministry of Finance. The bid price on a Ministry of Finance dim sum bond due in 2020 and paying a 2.48 per cent annual interest rate was 96.5 per cent of the face value yesterday, as quoted by DBS Bank, according to data from the HKMA's Central Moneymarkets Unit. The offer price was 99.5 per cent, leaving a gulf of three percentage points that would narrow in a more liquid market. At the same time, analysts reckon the yuan's pace of appreciation will slow this year as Beijing looks to cushion the blow of cooling overseas demand on its export sector. Indeed, the yuan has depreciated in the past two weeks in the spot market, weakening to about 6.325 to the US dollar yesterday from a high of 6.2964 on January 4. At the same time, recent fluctuations in the market for non-deliverable forward yuan contracts suggest the currency's current valuation may represent a "market equilibrium" rate, Ken DeWoskin, director of Deloitte China Research and Insight Centre, said yesterday. "While we have visitors to Beijing, for example US Treasury Secretary Timothy Geithner, who continues to urge the Chinese to let the RMB appreciate more, the market signals are more complicated now," DeWoskin said. For the yuan to maintain its attraction abroad, analysts say, there will need to be more investment channels that provide good returns, as the tide has turned on the yuan appreciation story. "If the RMB is not going to appreciate by 6 per cent a year - say it appreciates by 2 per cent a year instead - then there's going to be a different calculation," said DeWoskin. HKMA's Chan said yesterday that while yuan-denominated trade settlement and direct investment are off to a promising start, the framework for portfolio investment is "still under construction".

Hotel occupancy in Hong Kong reached 88 per cent last year, topping the peak of 86 per cent in 1996, hoteliers say. The Federation of Hong Kong Hotel Owners expects occupancy rates this year to be similar and forecasts room prices to rise by 6 to 10 per cent, compared with 15 per cent last year. Michael Li Hon-sing, the federation's executive director, said last year's strong growth was driven mainly by mainlanders and American visitors. Thanks to last year's strong performance, hotel staff received an average of three to three-and-a-half months' bonus last year, on top of an average 5 per cent pay rise. The average price of a hotel room last year was HK$1,343 - up from HK$1,218 in 1996 - according to the federation's deputy chairwoman, Belinda Yeung Bik-yiu, who is also an executive director at Regal Hotels (SEHK: 0078). The city's hotels have become fuller every year since 2009, when the occupancy rate was 77 per cent and rooms cost an average of HK$951 a night. Yeung said mainland visitors would continue to lead the growth this year, especially given the strong yuan. Responding to comments that the city had insufficient hotel rooms to meet the demand, Li said: "Those who say that Hong Kong doesn't have enough hotel rooms don't know a thing about the real situation. I don't agree with them." Room prices at hotels and hostels surged by as much as 80 per cent over Christmas, with rooms at The Peninsula going for more than HK$16,000. And even at the low end, rooms at Chungking Mansions, a backpackers' favourite, were fetching nearly HK$3,000. "These were extreme cases. Yes, during such peak seasons demand can be high, but that doesn't mean we have to conclude that Hong Kong has too few hotels and that we have to start building more now," Li said. He said there would be 5,000 more rooms by the end of the year, bringing the total to about 68,000. Despite a big increase in the number of visitors last year, lawmakers urged the government to improve the experience for visitors. At a meeting of the Legislative Council's economic development panel yesterday, they reminded the Tourism Board of various setbacks last year. In a poll, the Avenue of Stars on the Tsim Sha Tsui waterfront ranked second in the world's 12 worst tourist traps due to a lack of comfortable resting areas and its focus on the souvenir photo booths. A French research firm also listed Hong Kong as the second-worst among 30 cities for shopping. It said Hongkongers were not sufficiently friendly towards tourists. Tourism commissioner Philip Yung Wai-hung said the government would look into making the avenue more comfortable for visitors. Tourism Board chairman James Tien Pei-chun said mainland visitors rated the avenue as a top attraction. Paul Tse Wai-chun, the lawmaker representing the tourism sector, said the government should pay attention to the "culture shock" for Hongkongers of the influx of mainland tourists.

Italian fashion brand Dolce & Gabbana apologised on Wednesday morning for banning Hongkongers from taking photographs outside its store in a busy shopping street in Tsim Sha Tsui. “We understand that the events which unfolded in front of the Dolce & Gabbana boutique on Canton Road have offended the citizens of Hong Kong,” the firm said in a statement. “For this we are truly sorry and we apologise.” The Tsim Sha Tsui store became the target of protests this month amid reports that a security guard at the store tried to bar Hongkongers from taking photos of its shop windows, saying only foreigners and mainlanders were allowed to do so. Crowds have demonstrated outside the shop to denounce the firm, demand an apology and take pictures. People have also posted angry comments on the company’s website and Facebook page. The fashion company’s policy was “to welcome the Hong Kong people and that of the whole world, respecting the rights of each individual and of the local laws”, it said in Wednesday’s statement.

Leaving behind a lipstick or even a purse in the ladies' washroom will hardly raise an eyebrow after Caroline Scheufele managed to lose a 16.83 carat emerald ring worth an estimated HK$12.23 million. A reward of up to HK$500,000 has been offered to find the ring that vanished in minutes after being left in a fourth-floor washroom at the Four Seasons Hotel in Central about four months ago. Police have classified it as theft. According to a reward notice, the emerald is 16.83 carats and sits between two diamonds of 1.15 and 1.28 carats. There are another 674 small, round diamonds set around the ring. A Chopard Hong Kong employee confirmed yesterday that co-president Caroline Scheufele owned the ring. Police would only say that a foreigner lost the ring at a party at the hotel's Harbour View Ballroom to celebrate Chopard's opening at the IFC mall in Central on September 8. "She took off the ring to wash her hands and forgot about it when she left the washroom," said one of detectives at Central police in charge of the case. "When she remembered the ring a few minutes later, she went back but failed to find it." Scheufele is said to have last seen the ring at about 11.24pm and by 11.31pm it had gone. Police were called and officers searched the hotel to no avail, but detectives refused to say if staff and guests had been searched. "A lot of people were coming and going. The washroom was very busy," the officer said. It is unclear whether the reward is being offered by police or Scheufele, who was last night said to be travelling and unable to comment. Scheufele, who is based in Geneva, was wearing the ring during the ribbon-cutting ceremony at the IFC shop. The Swiss jewellery empire, founded in 1860 by Louis-Ulysse Chopard, was bought by her parents, Karl and Karin Scheufele, in 1963. Caroline and her brother Karl Friedrich are co-presidents. The incident comes as Hong Kong finds itself in a dispute over the ownership of a 16-carat yellow diamond allegedly stolen from a London jewellery shop more than four years ago. According to a lawsuit filed by Graff Diamonds this month with the New York state Supreme Court, the diamond was stolen in an armed raid on one of its stores in July 2007. The Yau On Pawn Shop in Hong Kong said it paid more than HK$3 million for it in November 2010.

Poor land-use planning coupled with a shortage of logistics facilities could limit the capacity of Kwai Chung's container terminals and air cargo operations, say experts. Hong Kong has increasingly become a transshipment hub for Chinese and other Asian cargo rather than an origin and destination centre. As a result, more space is needed for the development of distribution centres serving Asian markets and to provide capacity to handle transshipped containers that spend more time in port than originating cargo. Around 60 per cent of the cargo handled by Hong Kong's port in 2010 - equivalent to 13.1 million teu (20-foot equivalent) units - was transshipment cargo, with 39 per cent exports and imports from southern China. This compared with around 55 per cent of the container throughput in 2007. Transshipped containers can stay in port for a week waiting for their next sailing whereas export or import cargo may spend less than two days in port. Jonathan Beard, managing director of GHK (HK), noted that the 2020 Hong Kong port master plan study carried out in 2004 for the Port Development Council said it was vital to provide additional land around Kwai Chung and Tsing Yi for container terminals and related uses as a first priority and that in the short term this would provide additional capacity at lower overall cost. But he said progress in finding this extra land had been limited by the "piecemeal approach to logistics land planning and desire to maximise returns to treasury". Instead, he called for a city-wide approach "to balance the need for value-added logistics facilities and warehouses with [the] need for land adjacent to container terminals to maximise port capacity". He said the 2020 study identified a need for between 32 and 113 hectares of extra land to ensure maximum capacity at the nine Kwai Chung terminals. A 2030 port master plan is being carried out by a consultancy team led by BMT Asia. The study is due to be handed to the Transport and Housing Bureau in July. Echoing Beard's views, Edward Lau, managing director of TNT Express Hong Kong, said: "There needs to be a more balanced use of land to help the logistics sector." He pointed out there were insufficient distribution centres and depots in Hong Kong, facilities which will be crucial if the city is to compete with other centres in the region. TNT Express opened a 9,205 square metre distribution centre within the ATL Logistics Centre at Kwai Chung to support its key big-brand fashion customers, which rely heavily on airfreight to supply stores throughout Asia. Lau said it was "very difficult" to find such a large facility, adding that it was full within four months of opening last August. Chinese University and BMT are working on a study for the Trade Development Council of whether more distribution centres are needed. Logistics and other firms have been asked to complete a questionnaire for the study, to be finished in April.

The police have vowed to better co-ordinate their fight against cybercrime after the amount of money lost in computer-related offences hit an all-time high. The force recorded 2,206 cases of computer crime last year, up 34.3 per cent. Some HK$149 million was lost, more than double the figure in 2010, which was HK$60 million. The force already has a technology crime division, but Xavier Tang Kam-moon, deputy commissioner for operations, said a new cybersecurity centre would co-ordinate with overseas law enforcement agencies, government departments and industries to collect intelligence to combat such crime and to protect important government and commercial websites. The war against cybercrime has been added to the operational priorities for the year. Police commissioner Andy Tsang Wai-hung said cybercrime had become more complicated and difficult to investigate as the culprits were often based overseas. "Technology crime has changed. It used to be problems in online games. But now online games problems rank the lowest [in number] among all technology crimes. Online commercial scams are now the [highest]," he said. There were 11 "denial-of-service" attacks last year, in which a computer or a network is attacked by multiple computers, making them inaccessible to intended users. In 2010, there was only one. A 28-year-old man was arrested in relation to a cyberattack on the stock exchange's website which forced a halt to trading in seven firms' shares. Tang said a new type of commercial e-mail scam emerged last year in which hackers conned businesses by impersonating their trading partners. There were 155 such cases, accounting for HK$49.23 million in losses. The amount of money lost via online auction fraud fell slightly, though. The overall crime situation remained steady. Police recorded 75,936 crime cases last year, a slight decrease of 0.04 per cent. But the detection rate was 42.5 per cent, the lowest since 2003. There had been 20,128 miscellaneous theft cases, up 1,070. Deception cases also rose by 482, to 6,134. Triad-related crimes were up 8.3 per cent, at 2,207. Tsang said there had been more debt collection incidents related to loan sharks in Macau. They offered free accommodation, ferry tickets or even female escorts to lure victims into borrowing money to gamble. The amount of heroin and cannabis seized also surged by 152.2 per cent and 318.2 per cent, respectively. Lee Ka-chiu, deputy commissioner for management, said guidelines for officers' behaviour on the internet would be issued this week after some were found leaking sensitive data and posting compromising photos of themselves in uniform. He said they required officers to remain politically neutral, avoid revealing sensitive information and information related to operations, and uphold the force's image when using the internet, especially social media sites. The force will hire 180 inspectors and 890 constables in the next financial year.

 China*:  Jan 19 2012 Share

Qunar CEO Zhuang Chenchao, holding a toy camel bearing the company logo, expects travel industry revenue to grow 14 per cent annually. Chinese travel search website is considering an initial public offering in the United States as it expects revenue to double this year amid soaring demand for travel services. Qunar, partly owned by search giant Baidu, broke even in 2010 and more than doubled sales last year to "a few hundred million" yuan, chief executive Zhuang Chenchao said. Zhuang declined to give a timeframe or other target terms for a share sale. The website gets most of its revenue from cost-per-click travel advertisements and may raise money from US investors after selling a US$306 million majority stake to Baidu in June last year. China's tourism market might overtake Japan's as the world's largest after the US by next year, Boston Consulting said in March last year. "We are a unique platform that connects the traditional IT system of airlines and hotels with massive information searches on the internet," Zhuang said last week. Zhuang is attracting users by offering flight and hotel booking information that is not limited to specific vendors and allows searchers to make reservations directly with airlines, hotels and services that match their needs. China travel industry revenue is expected to grow 14 per cent annually to 5.5 trillion yuan (HK$6.75 trillion) in 2020 from 1.5 trillion yuan in 2010, according to Boston Consulting. "Moving forward, the whole nation will be more and more comfortable using online travel," Zhuang said. Tencent (SEHK: 0700), the country's biggest internet company, bought a 16 per cent stake in Qunar's competitor eLong for US$84.4 million to expand in online travel. Rival International listed on the Nasdaq Stock Market in December 2003. Qunar will consider a share offering "as soon as the market becomes stabilised", said Zhuang, who worked for the World Bank in Washington from 2001 to 2005. Qunar, which means "Where do you want to go?" in Chinese, was founded in 2005. It provides information on air tickets, hotels, packages, visas and other travel services, according to its website. Its search functions list options for travellers, who are then directed to the websites of airlines, hotels and other travel services, to make their purchase. Travel booked on the internet accounted for about 7 per cent of the mainland's tourism market and that ratio was expected to surge to 30 per cent in the next five years, similar to current levels in the West, Zhuang said.

Britain said yesterday that it had signed deals with China to research stem cells and smart grids, after finance minister George Osborne held talks with officials in Beijing aimed at attracting investment. Osborne's two-day visit was primarily focused on taking forward plans to make London a key trading hub for the yuan and persuading mainland companies to invest in British infrastructure projects. The British embassy in Beijing refused to comment on the outcome of his talks with officials including Vice-Premier Wang Qishan - the nation's top finance official - after Osborne left Beijing in the afternoon for Tokyo. But Xinhua reported both discussed Europe's economic situation. Wang asked London to facilitate Chinese companies to invest in Britain. Osborne said Britain welcomed Chinese firms to invest in its infrastructure and London would like to strengthen co-ordination with Beijing on major global economic issues. The first deal signed focused on joint research in the field of smart grids - electricity networks that can track the behaviour of users to monitor and deliver supplies more efficiently - the embassy said in a statement. The other agreement pledged up to £770,000 (HK$9.15 million) worth of joint investment into stem-cell research. Osborne also held talks with the heads of the nation's sovereign wealth fund, China Investment Corporation, and ICBC - the largest bank in the world in terms of market capitalisation - as well as Zhou Xiaochuan, governor of the People's Bank of China. His Beijing visit came after a stop-over in Hong Kong, where he said Britain had agreed to partner with Hong Kong to develop the City of London as a major offshore centre of trade in the yuan. Hong Kong is the world's only officially designated offshore yuan trading centre, but Britain is keen to make London - the heart of European banking - the second such market. China and Britain agreed in September to work towards this goal, and Osborne on Monday announced the launch of a joint private-sector London-Hong Kong forum to support Beijing's efforts to develop the offshore market for the yuan. The new forum will examine ways Britain and Hong Kong can streamline clearing and settlement systems, boost market liquidity and develop new yuan-denominated products. Osborne's China trip was also aimed at attracting investment into British infrastructure.

China has announced that people living in its towns and cities now outnumber those in the countryside, making it a predominantly urban nation for the first time in Chinese civilization. The milestone spotlights a trend that China's government says will be a key driver of economic growth over the next two decades as hundreds of millions more people move into urban areas in search of higher-paying jobs. But it also points to the challenges facing Chinese leaders as mass migration places an increasing strain on urban housing, transport and welfare, while fueling pollution, social unrest and demands for political reform. Urban dwellers account for 51.27% of China's entire population of nearly 1.35 billion—or a total of 690.8 million people—the National Bureau of Statistics (NBS) announced at a news conference in Beijing on Tuesday. City dwellers represented just 10.6% of China's population in 1949, when the Communist Party took power, and just under 19% in 1979, when it launched the market reforms, according to official Chinese statistics. That means that in the economic boom of the past three decades, China has roughly matched what economic historians say took about 200 years in Britain, 100 years in the U.S. and 50 years in Japan. Many experts expect the trend to continue at a similar pace in China, with McKinsey, the consulting firm, forecasting last year that the country would have one billion urban residents by 2030—its urban population growing by more than that of the entire U.S. in just two decades. The social cost of urbanization is becoming increasingly evident, however, with 253 million rural migrants now living in Chinese cities with little or no access to public services, which they can only access in the villages where they are registered under the "hukou" or household-registration system. The demand for urban property has also led to rampant seizures of farmland near towns and cities by local officials, who typically pay farmers a nominal fee before selling at market rates to developers who often build luxury housing and shopping malls. Wen Jiabao, the Chinese Premier who is entering his last year in power this year, called for greater efforts to tackle such illegal land seizures in an essay published this week in an official Communist Party magazine called Qiushi, or Seeking Truth. China had "lowered the costs of industrialization and urbanization by sacrificing farmers' rights to land," he wrote. "No one is empowered to take away such rights." Mr. Wen also criticized a widespread policy of moving villagers into apartment blocks so their land can be merged into larger blocs or used for property development. Growing public anger at land grabs came into focus last month when residents of the fishing village of Wukan in the southern province of Guangdong staged an open revolt against local officials they accused of illegally selling their land to property developers. Such land disputes account for 65% of "mass incidents"—the government's euphemism for large protests—in rural areas according to Yu Jianrong, a professor and expert on rural issues at the state-run Chinese Academy of Social Sciences. China's Land Ministry has also warned that misappropriation of farmland has brought the country dangerously close to the so-called red line of 120 million hectares of arable land that the government believes it needs to feed China's people. Mr. Wen said in his essay that China needed to modernize its agricultural technology in order to meet the demand for food from its expanding population despite the shortage of land and water resources. However, the central government's efforts to curb land abuses have so far met fierce resistance from local authorities who rely on land sales to maintain growth, service debt and top up their budgets.

Vice-Premier Li Keqiang enjoys a humorous moment on Monday during a visit to Guyuan, in Northwest China's Ningxia Hui autonomous region. Ma Lingying had never imagined that her modest home in a remote village in Northwest China's Ningxia Hui autonomous region would ever have such a distinguished guest. But the surprises did not stop there. The guest, after seeing her badly repaired roof and basic sleeping arrangements, promised her and the villagers a better life. Vice-Premier Li Keqiang visited the town of Kaicheng in Guyuan city on Monday and Tuesday and told officials to work harder to help the poor. He urged local governments to speed up the renovation of housing in the countryside, especially in poverty- stricken areas such as Guyuan. The average annual income of farmers in poorer parts of Guyuan was 3,390 yuan ($537) in 2011, just half of the national per capita rural income of 6,977 yuan, according to official figures. A meeting held in Beijing in November to map out efforts to alleviate poverty in rural areas over the next decade recommended certain basic requirements for people. President Hu Jintao said at that meeting that people would be provided with adequate food and clothing and have access to education, basic medical services and housing by 2020. Wang Xiaolin, director of the research division of the International Poverty Reduction Center in China, said it was important for the government to offer more subsidies and ensure that rural properties for the poor in Ningxia were built with durable construction materials. "Due to the lack of rain in Ningxia and the underdeveloped irrigation system, farmers' incomes often fluctuate from year to year," Wang said. To lift more farmers out of poverty the government should increase investment to improve infrastructure in rural areas, he said. The government should also provide more compensation for rural dwellers as they may have to give up arable land to plant trees to combat climate change, he said. Wang also said the government should improve access to basic social services in rural areas, including free education and affordable healthcare as part of a long-term poverty reduction strategy. During the visit, Li urged local governments to boost medical reform and ensure the quantity and quality of affordable housing in the city. Housing, medical services and education are the basic needs of the people, and governments are duty-bound to meet such needs, Li said. Li also visited a supermarket in Yinchuan, capital of Ningxia. Price stability is important and food safety should be guaranteed, especially with Chinese New Year approaching, he said.

Mickey Mouse and Winnie the Pooh are setting up shop in China. Walt Disney Co is on track to open its first store in China in fall 2012 and is committed to opening from 25 to 40 stores in the most populous country during the next three years, a top company executive said. The news comes as Disney, the largest media conglomerate in the world and the owner of many iconic brands such as Mickey Mouse and Winnie the Pooh, looks beyond the United States, Europe and other developed markets for new sources of revenue. "China is very important to overall Disney company plans, obviously with the launch of the Shanghai Disneyland Park," said Jim Fielding, president of Disney Stores Worldwide. "So, it is probably the newest country that is getting the most focus." Disney broke ground on the Shanghai Disneyland theme park in April 2011. The Chinese are not unfamiliar with the Disney brand. "Because the licensing division has had a presence in China already, there is affinity for the brand and affinity for characters," he said. "The market is ready." Disney has signed a lease for its first store in Shanghai and is looking at sites in Beijing and other large cities, Fielding said. "We are focusing on tier-one cities in very high population and tourist locations, very similar to what we look at around the world," Fielding said. The difference in China will come in the strategy Disney employs to woo customers. "The product assortment is definitely localized to Chinese consumers and Chinese knowledge because they don't know all the Disney characters that people know in America and in Europe," he said. For instance, he expects Disney's China stores to carry more products under the Mickey Mouse and Winnie the Pooh labels and fewer Princess Dolls - figurines of female characters from the company's various movies. Disney refused to shed light on how much it plans to invest in China. China's increasing wealth and the country's huge population make it an attractive destination for many global companies. While Disney is excited about its prospects in China, it is not as optimistic about other markets. Disney, which opened its first store in 1987, launched a new retail format in 2010 and has been making a push in the past year to take its retail model to ritzy malls in newer markets on both sides of the Atlantic.

Workers check solar panels at Jiyang New Energy Co Ltd in Yancheng, Jiangsu province, earlier this year. Solar-energy projects have boomed in China in recent years, as the country seeks new sources of energy. A total of $64 million from China Development Bank Corp (CDB) to construct solar power plants in California and New Jersey helps create jobs and benefits the local economy, said a spokesman for Solar Power Inc (SPI). China-based LDK Solar Co Ltd announced on Jan 4 that it had secured $20 million from CDB to construct two solar power plants in California. In addition, SPI, a California-based company majority owned by LDK, received $44 million from CDB to pay for the construction of solar projects it is working on jointly with KDC Solar LLC in New Jersey. Established in 2005, LDK is a supplier of solar cells in Xinyu, Jiangxi province. It employs more than 20,000 workers worldwide. SPI installs solar arrays on commercial buildings, including the 20th Century Fox movie studios in Los Angeles. SPI switched its focus from residential to commercial projects when its sales plummeted during the financial crisis. In March 2011, LDK acquired 70 percent ownership of SPI for about $33 million. It also took over SPI's manufacturing plant in Shenzhen, Guangdong province. CDB concentrates on financing emerging industries in China, which include solar power and other forms of clean energy. Since LDK's founding in 2005, CDB has helped the company grow into one of China's largest integrated solar photovoltaic (PV) companies. In line with China's "Go Global" strategy to acquire natural resources and expand China's multinational businesses and brands, CDB has been scaling up its international lending. Its book of outstanding domestic and foreign-currency loans totaled 4.51 billion yuan ($714 million) at the end of 2010, according to LDK's relationship with CDB has enabled SPI to significantly enhance its solar project financing capabilities. Mike Anderson, SPI's vice-president of corporate communications, noted that LDK's investment and support "has opened doors to key relationships like the one we now enjoy with CDB, enabling us to get financing for projects at a time when it is very difficult to come by". In June 2011, SPI reached a three-year agreement with KDC to provide engineering on solar energy projects in New York and New Jersey. "Our successful relationship with CDB is a direct result of our close working relationship with LDK," said Steve Kircher, SPI's CEO, in a press release. "As we continue to develop our pipeline of projects globally, our partnership with CDB grows stronger." SPI will look to CDB for additional financing as it continues to add to its pipeline of large-scale solar projects domestically and internationally, company officials said. SPI targets the Americas, Europe, Africa and the Caribbean. SPI says it is currently not doing any development work in China because LDK already is executing its own projects in the country. Earlier this month, SPI announced it had won a contract from Seashore Solar Development LLC to build an 11.3 megawatt solar energy plant in Egg Harbor Township that will provide the southern New Jersey power grid with clean, renewable electricity. The project is expected to create about 200 local jobs during construction, which will begin in the first quarter of this year, in addition to helping meet the state's clean energy targets. Anderson said solar energy plants help local businesses save money by generating low-cost electricity. These projects also generate local employment. "As we continue forward and secure more of these solar projects, thousands of jobs will ultimately be created," said Anderson. "Every system we produce provides a hedge against rising energy costs. Additionally, our systems produce clean, renewable energy, which reduces dependence on fossil fuels and benefits the environment - this too has cumulative, long-term benefits."

Hong Kong*:  Jan 18 2012 Share

After a two-year search for a new music director, the Hong Kong Philharmonic orchestra has signed up one of the world's leading conductors to replace outgoing director Edo de Waart, the Philharmonic Society said on Monday. Dutch maestro Jaap van Zweden, music director of the Dallas Symphony Orchestra, has accepted a four-year contract, starting with the 2012-13 season which begins in August. “It is a tremendous step forward for the Hong Kong Philharmonic Orchestra to be joined by one of the world’s most sought-after conductors,” said Y.S. Liu, chairman of the board of governors of the Hong Kong Philharmonic Society and of the music director search committee. “We salute maestro van Zweden’s artistic leadership, and entrust in him not only the future development of the orchestra, but also that of Hong Kong’s cultural advancement.” Van Zweden, 51, responded to the news by saying, “I can’t tell you how thrilled and honoured I am to be appointed music director of the Hong Kong Philharmonic Orchestra. My work as music director will go beyond the concert stage, and include what I think are essential elements for the growth of the orchestra, such as the education programme and advocacy for a world-class home for us in the West Kowloon Cultural District.” Van Zweden won the coveted Conductor of the Year prize last November, awarded by Musical America. He will officially assume the role of music director on August 1, and perform his inaugural performances on September 28-29, in concerts celebrating National Day at the Hong Kong Cultural Centre. Van Zweden was one of a dozen candidates aiming to succeed de Waart as leader of Hong Kong’s top orchestra. The two men have a long association. Van Zweden was concertmaster of the Concertgebouw Orchestra in Amsterdam for 16 years, with which de Waart guest-conducted and recorded. In 2004, he succeeded de Waart as music chief of the Netherlands Radio Philharmonic Orchestra. Next year, de Waart will lead the Royal Flemish Philharmonic. “I think there is an advantage for me to work at an orchestra previously led by Edo, although we are totally different,” van Zweden said recently. “Edo is more an orchestra-builder, and I am more on the performance side.” De Waart reacted to the appointment by saying, “I am very happy with the appointment of my fellow Dutchman Jaap van Zweden as my successor. He is a wonderful musician who I am sure will bring the Hong Kong Philharmonic to new heights. I wish him and the orchestra all the best.” The search for the orchestra’s next leader began as soon as de Waart, 69, announced in March last year that he would leave the post after the 2011-12 season. In 2007, de Waart moved his family out of Hong Kong to protect his son Sebastiaan, who suffers from asthma, from the city’s air pollution and declared that the philharmonic was likely to be his last major posting. But that year he renewed his five-year contract. Van Zweden, the 8th music director of the Hong Kong Philharmonic, was born in 1960 in Amsterdam and took up the violin at age five. Winning a violin competition was his ticket to New York’s famed Juilliard School of Music, under the eminent teacher Dorothy DeLay. In 1979, at age 18, van Zweden became the youngest concertmaster of the Concertgebouw Orchestra, one of the world’s greatest ensembles. For the next 16 years he worked with top conductors such as Carlos Klieber, Sir Georg Solti, Leonard Bernstein and many others. It was Bernstein who, inviting van Zweden to conduct during one rehearsal, opened the way to his conducting career. Since 1996, van Zweden has led various orchestras, including the Netherlands Symphony Orchestra (1996-2000), the Residentie Orchestra in The Hague (2000-05), the Netherlands Radio Philharmonic (2005-12) and the Royal Flemish Philharmonic (2008-12). He is currently the music director of the Dallas Symphony Orchestra. His guest conducting at major American orchestras in Philadelphia, New York, Boston and Chicago led to his winning the Conductor of the Year for this year award. As a recording artist, van Zweden has recorded the complete Beethoven symphonies and is currently recording the Bruckner cycle with the Netherlands Radio Philharmonic. Van Zweden made his Hong Kong debut with the Concertgebouw’s visit in 1993. He made his conducting debut with the Hong Kong Philharmonic in 2006, when he led the orchestra to a thrilling performance of Beethoven’s Fifth Symphony. In March last year, he was invited to work with the orchestra in a special session. But his appointment became all but certain in November, when his two programmes of Brahms and Prokofiev were performed to enthusiastic acclaim. Van Zweden and his wife, Aaltje, have four children. One of their sons, Benjamin, is autistic, and the family set up the Papageno Foundation in 2000 to offer music therapy to autistic children. In its 37-year history as the city’s top and – with an annual HK$100 million operating budget – most costly professional performing body, the Hong Kong Philharmonic Orchestra has had seven music directors.

Britain is teaming up with Hong Kong to secure London a top spot as an offshore trading centre for the Chinese currency, as the UK aims to boost trade and investment ties with fast-growing Asian markets. In a speech at the Asia Financial Forum on Monday, Britain’s finance minister George Osborne also urged countries to fight protectionist tendencies and repeated Britain’s willingness to add further funding to the International Monetary Fund (IMF). Speaking only days after ratings agency Standard & Poor’s downgraded a number of euro zone countries including France, Osborne applauded progress made by the euro area though he urged further actions to restore sustainable finances and growth. Britain’s coalition government has launched a drive to expand trade and investment ties with major developed and emerging economies outside Europe to lessen its dependence on trade with the crisis-hit euro zone. “I believe that we can make Britain the home of Asian investment and Asian finance in Europe,” Osborne said, according to the text of his speech, which kicks off his official programme during a trip to China and Japan. The British government’s aim was for London to complement Hong Kong in becoming a major offshore centre for the yuan, the Treasury said in a press release. Britain’s finance ministry and the Hong Kong Monetary Authority (HKMA) would facilitate a private-sector forum to explore synergies, specifically looking at clearing and settlement systems, market liquidity and the development of new products denominated in yuan. Britain won the Chinese government’s backing for London to become an offshore trading centre for the yuan last year. Osborne welcomed a recent announcement by the HKMA that it will significantly extend the operating hours of its yuan payments systems to better accommodate European transactions, making it easier for transactions in London to be settled. London would join other centres, including Singapore and Taipei, which are vying for a share of the growing offshore yuan business. But all are expected to have to play second fiddle to Hong Kong as Chinese authorities push on with a series of initiatives to internationalise the currency. Osborne will meet the finance ministers and central bank governors of China and Japan as well as Japanese Prime Minister Yoshihiko Noda and investors during his trip aimed at strengthening ties in financial services, infrastructure and innovation. Britain is close to recession again as the government’s tough spending cuts aimed at erasing the huge budget deficit bite and the crisis in the euro zone - its main trading partner - weighs on exports and business confidence. “The euro zone has made progress in recent months, in particular the provision of liquidity to banks by the ECB,” Osborne said. “But of course there remains more to do, as the euro area itself acknowledges.” The international community had to make sure that the IMF had the tools and resources to promote global economic stability, Osborne said. Last week, Osborne said Britain may increase its contribution to the fund together with major non-European countries such as China or Japan, but ruled out higher contributions if they were earmarked to prop up the euro zone. “The IMF does not belong to any one region of the world,” Osborne said in his speech. “Its role is to support countries which get into difficulty, not currencies.” Presenting his international agenda for this year, Osborne vowed to push for trade liberalisation, using “new and innovative alternative approaches” as the World Trade Organisation’s global approach was stuck at a “significant impasse”. Britain would also work to ensure that global standards for financial regulation would be implemented, he said, repeating his rejection of a financial transaction tax on a European level, which France and Germany have been seeking.

A senior official at China's securities regulator said the agency is revising regulations that will make it easier for smaller and non-state-owned companies to list in Hong Kong, Yao Gang, vice chairman of the China Securities Regulatory Commission, said at a forum Monday that the regulator also plans to encourage Chinese companies to launch yuan-denominated share offerings in Hong Kong this year. So far, only one company has successfully completed a yuan initial public offering after Beijing in 2010 relaxed some restrictions on the use of the nation's currency in Hong Kong. "We will revise some regulations to lower the threshold for overseas listings, so as to allow (small and medium-sized companies) and private companies to directly list in Hong Kong," Mr. Yao said. He said the commission is working on strengthening cross-border regulatory frameworks for capital markets in Hong Kong and China to facilitate more Hong Kong listings by Chinese companies.

 China*:  Jan 18 2012 Share

Two pandas have landed in Paris for a new life in a loan sealed after years of top-level negotiations between France and China. The "Panda Express," a Boeing 777 decorated with a panda motif, carried the bears from Sichuan province to Charles de Gaulle airport, where staff from Beauval zoo were on hand to greet them. Huan Huan (Happy) and Yuan Zi (Chubby) are the first pandas sent to France since 1973, when Yen Yen - who went on to live until 2000 - was given to then- president Georges Pompidou along with another panda, which died shortly after arriving. The latest furry ambassadors, which were especially selected for their breeding potential, are bound for the zoo in central France for a 10-year stay. But the public will have to wait until February 11 to get their first glimpse of the bears in their 2.5-hectare enclosure. The deal was to have been announced at the G20 summit in Cannes in November, but had to be delayed due to the euro crisis.

Beijing and Washington breathed a sigh of relief over Ma Ying-jeou's win in Saturday's presidential polls. Good cross-strait relations also help keep Sino-US ties from fraying over the Taiwan issue - With Ma Ying-jeou being re-elected to lead Taiwan, Beijing and Washington can breathe more easily knowing that confrontations will be kept to a minimum between the two powers regarding issues over the island, analysts said yesterday. But analysts also expect trilateral relations between the mainland, the United States and Taiwan to become trickier, even though ties among them should warm in the next four years, because Ma is expected to get closer to the US in efforts to enhance the island's cross-strait bargaining power. Saturday's presidential election in Taiwan was closely watched in Beijing and Washington, where both believe that Ma will be more conducive to stable cross-strait ties. The US, positioning itself as the island's chief defender, feared that it could have been pulled into conflicts with Beijing if the pro-independence Dr Tsai Ing-wen were elected. In what was regarded as an endorsement for Ma's campaign, Douglas Paal, a former de facto US ambassador to Taiwan, said in a local TV interview on Thursday that the US was not pleased with Tsai's approach to dealing with the mainland. Paal later denied playing a role in the election, but he told Taiwan's Central News Agency that the election results came as a relief to the US, China, Japan and Singapore. "Tsai may have resorted to actions such as a referendum, because she was under pressure from the pan-green camp to do that. This would have deteriorated cross-strait ties," said Professor Jia Qingguo from Peking University's School of International Studies. "China and the US may then have become embroiled in a diplomatic spat." Beijing has been irked by any moves suggesting that the US recognises Taiwan's independence. Beijing suspended military exchanges with the US in 2010 after Washington approved a major arms sale to Taiwan. And in September, Beijing again condemned the US for approving the latest arms-sales package. "The US will not stop selling arms to Taiwan, but the scale of the packages may be cut back. It is possible for the US, China and Taiwan to reach some sort of agreement regarding arms sales," Jia said. Professor Arthur Waldron, who teaches international relations at the University of Pennsylvania, said the election results were welcomed because Beijing is more comfortable with Ma. In his acceptance speech, Ma vowed to continue economic restructuring in Taiwan and to participate in the US-backed Trans-Pacific Partnership (TPP) - a trade deal announced in November that did not include Beijing. Analysts said the island's participation in the TPP, as well as renewed talks on a Trade and Investment Framework Agreement that were suspended in 2007 because Taiwan banned US beef imports, were tactics used by Ma to keep ties strong with the US. "Taiwan will use the US factor when dealing with the mainland, especially in negotiations on sensitive issues, such as those involving how Taiwanese people should be identified," said Professor Edward Chen I-hsin, who teaches American studies at Taiwan's Tamkang University. "The Ma administration will not put the US aside just because of economic gains from the mainland. Taiwan wants the US to provide security protection, which increases its bargaining power." Waldron said Ma would engage the US and other Asian countries more during his second term because he did not embrace the notion of Taiwan becoming part of a greater China, and he needed to fend off critics who accused him of being heavily reliant on Beijing. "He does not want to put all his eggs in one basket. He doesn't want to tie himself to China in a way that if China begins to go down, it would drag Taiwan down, too." But Waldron said Washington might not give too much away to Taiwan because the US believed that keeping the status quo across the Taiwan Strait meant less trouble. Beijing will be suspicious of Taiwan getting closer to the US and other countries, but analysts don't expect Beijing to take drastic action. Lee Teng-hui, regarded by Beijing as being pro-independence, won the 1996 presidential election even after the mainland conducted missile tests in waters surrounding Taiwan, in an attempt by the central government to turn voters against Lee. Four years later, when Lee did not run for re-election, the pro-independence Democratic Progressive Party's Chen Shui-bian was elected even though former premier Zhu Rongji appealed to Taiwan's voters not to make impulsive decisions. "Beijing cannot oppose anything Taiwan does," Chen said. "It has to consider the possible impact on the overall situation."

An industry group says the number of internet users in the mainland has surged past 500 million and is still growing strongly. The China Internet Network Information Center (CNNIC) said on Monday the number stood at 513 million in December, up 12 per cent from a year earlier. The government promotes internet use for business and education but tries to block access to material it considers subversive or pornographic. The latest figures also showed the number of mainlanders who surf the web by mobile phone rose 17.5 per cent to 356 million. Use of microblogging quadrupled last year compared with the previous year, with nearly half of all internet users now taking to the service to gather news and spread views, the CNNIC said. Microblogging, or weibo, allows users to send short messages of 140 characters or less to their followers. Twitter, the most popular microblogging platform in the world, is blocked by censors in the mainland. Sina and Tencent (SEHK: 0700) both run popular weibo platforms, both firms claim to have more than 200 million users. Last year was a watershed year for weibo with major events such as the Wenzhou high-speed train crash in July fuelling intense discussion on the platform. The vibrant discussion and rapid dissemination of information on weibo has caused concern within the ruling Communist Party, which fears that loss of control could threaten its authority. In December, some city governments announced rules to regulate microblogging operators, requiring new users to register with their real names. The total number of weibo users rose 296 per cent to 249.9 million last year, data from the CNNIC showed, meaning nearly half of the mainland internet population had access. Another spot of high-growth was the group-buying industry, which saw a 244.8 per cent user growth, bringing the total to 64.7 million users at the end of December.

Premier Wen Jiabao meets with Saudi Arabian King and Prime Minister Abdullah bin Abdul-Aziz in Riyadh, Saudi Arabia on Sunday to sign deals on oil supply in the event of problems with Iranian shipments following enhanced US sanctions agains Tehran. China signed energy deals with its top oil provider Saudi Arabia on Sunday as its Premier Wen Jiabao visited the kingdom with tension over Iran’s nuclear programme sparking fears of major oil supply disruptions. Wen met King Abdullah on Sunday, Saudi state news agency SPA said, adding that the two leaders “discussed regional and international developments, as well as co-operation between the two countries.” Saudi Arabia is the largest supplier of oil to the mainland and bilateral trade between the two countries amounted to US$58.5 billion in the first 11 months of last year, according to the official Xinhua news agency. The two countries signed several economic and cultural agreements on Sunday including a Memorandum of Understanding between Saudi petrochemical giant SABIC and China’s Sinopec (SEHK: 0386) to build a petrochemical plant in Tianjin, SPA said. They also signed a co-operation agreement for the “peaceful use of nuclear energy,” it added, without elaborating. On Saturday, Wen met with Crown Prince Nayef bin Abdul Aziz, who is Saudi’s interior minister, SPA reported. Wen also held talks with the head of the Organisation of Islamic Co-operation, Ekmeleddin Ihsanoglu, an OIC statement said. The Gulf tour will also take Wen to the United Arab Emirates and Qatar. His trip comes as the West ups the stakes in its stand-off with Iran, threatening to impose sanctions on the oil exports of the Islamic republic, which provides 11 per cent of China’s oil imports. Iran is the third largest provider of oil to China. Qatar and the UAE, although both major oil-producing states, do not yet figure among the top 10 oil suppliers to Beijing. The visit comes days after Wen met with US Treasury Secretary Timothy Geithner, who was in Beijing to build support for the new US sanctions that aim to squeeze Iran’s crucial oil revenues. The measures bar any foreign banks that do business with Iran’s central bank – responsible for processing most oil purchases in the Islamic republic – from US financial markets. But China opposes the sanctions on Iran, which Washington and other nations accuse of developing nuclear weapons – a claim denied by Tehran. Japan’s Foreign Minister Koichiro Gemba was in the Gulf last week also on a tour aimed to secure oil supplies in case of a shortage resulting from sanctions on Iran’s oil exports. Iran has starkly warned Gulf states not to make up for any shortfall in its oil exports under the new US and EU sanctions. If Arab neighbours compensate for a looming EU ban on Iranian imports, “we would not consider these actions to be friendly,” Iran’s representative to Opec, Mohammad Ali Khatibi, was quoted as saying by the Sharq newspaper on Sunday.

Large advertisements for luxury brands, such as this one for Louis Vuitton in downtown Wuxi, Jiangsu province, are now common in cities, big and small, across China. The global economy may be in a tailspin, but Asia's affair with high-end goods continues to bloom, reports Karl Wilson in Sydney. When Selfridges of London, one of the world's most famous department stores, opened its post-Christmas sale on Boxing Day, the mall enjoyed the most profitable period in its entire history, raking in a staggering 1.3 million pounds ($2 million) in just 60 minutes. Asian shoppers, thousands of them, kept the tills ringing. In a tribute to the growing clout of Asia, the Daily Mail newspaper wrote: "Thousands of Asian shoppers were to be found elbowing their way through the throng as keenly as the most bargain-savvy Brits. "Not long ago, the number one Asian clientele would have been Japanese (but) the Pacific's financial tectonic plates have well and truly shifted. In the past 12 months, visitors from China have comfortably surpassed all the oil-rich Arab nations, Japan, Russia and the United States to become Selfridges' number one overseas nation in terms of spending power." With the Chinese New Year edging closer, sellers across the world are gleefully rubbing their hands in anticipation of another shopping frenzy that will give a boost to both quality and quantity purchase. The global economy may be in a tailspin, and retail outlets across Europe, the US and Australia may be crying poor, but the high-end luxury market is blooming in Asia. Whether it be the opulent fashion shopping districts of China and Hong Kong, Singapore or Japan, 2011 was a big year, and 2012 is expected to be even better for some of the world's biggest names in luxury. Brands such as Cartier, Jaeger-LeCoultre, Van Cleef and Arpels, Gucci, Prada, Hermes, Christian Dior and Burberry all reported significant sales increases last year - up to 20 to 30 percent - and an encore is likely in the Year of the Dragon. US-based marketing and consultancy group Bain and Co said the global luxury goods market last year grew by 10 percent to 191 billion euros ($242 billion), leaving far behind the 173 billion euros in 2010 and 153 billion euros in 2009. The 10th Luxury Goods Worldwide Market Study, the global management consulting firm's survey released at the end of 2010, found that even in the mature markets of Europe and the US, Chinese tourists are driving sales rather than domestic shoppers. In key European luxury cities such as Milan and Paris, Chinese tourists accounted for more than 50 percent of total luxury sales. The World Luxury Association, the international nonprofit organization specializing in the management of luxury brands and market research, corroborated the study. It noted that Chinese tourists spent $50 billion in Europe last year, four times the amount they spent on luxury goods back home in 2010. Japan led the way in luxury shopping in Asia with 18.5 percent of the global market. China followed closely behind with 12.9 percent, while South Korea (7.6 percent), Hong Kong (5.8 percent), Taiwan (3.9 percent) and Singapore (3.2 percent) formed the rest. However, after suffering more than a decade of flat economic growth, exacerbated by a devastating earthquake and tsunami last year, many Japanese are not spending as much as they used to on luxury brands. This restraint has made analysts predict that Chinese consumers will soon overtake the Japanese, the world's second largest luxury market shopper after the US. Many of the world's top names in luxury have refocused their attention and expansion programs away from Japan and onto China, to cash in on country's growing new rich. Italian luxury goods trade group Altagamma said that although Japan accounts for 11 percent of the global market, attitudes toward branded goods have been shifting and Japanese consumers - who for long have equated high prices with quality - are now embracing value. The strong yen has also hit sales. The same goods are relatively more expensive in Japan and so savvy consumers are instead opting to make their purchases abroad. Global consultants McKinsey found 17 percent of Japanese consumers bought luxury products in North America last year, compared with 10 percent in 2010. Leading brokerage and investment group CLSA forecasts that China will become the world's largest market for high-end goods in five years. "Luxury sales in China represent 10 percent of the global market," the group said in a report last year. "If we include sales to Chinese tourists abroad, we estimate Chinese consumers to account for 15 percent of global sales." Given rising incomes and supportive social factors, CLSA expects Chinese customers to account for 44 percent of global luxury sales by 2020.

A pet breeder plays with a dog inside a pet hotel in Chengdu city, Southwest China’s Sichuan province, on Jan 14, 2012. As the 7-day Spring Festival holiday approaches, many pet owners planning to travel during the period choose to send their pets to pet hotels for better treatment while saving themselves the trouble of complying to the regulations and rules set for pets in transit.

Premier Wen Jiabao talks with family members of Abdul-Rahman Ali Al-Jeraisy, president of the Saudi Arabia-China Friendship Association, during a visit to his home in Riyadh on Sunday. RIYADH, Saudi Arabia - In what Riyadh calls "the largest expansion by any oil company in the world", Sinopec's deal on Saturday with Saudi oil giant Aramco will allow a major oil refinery to become operational in the Red Sea port of Yanbu by 2014. The $8.5 billion joint venture, which covers an area of about 5.2 million square meters, is already under construction. It will process 400,000 barrels of heavy crude oil per day. Aramco will hold a 62.5 percent stake in the plant while Sinopec will own the remaining 37.5 percent. The deal "represents a strategic partnership in the refining industry between one of the main energy producers in Saudi Arabia and one of the world's most important consumers", said Aramco president and CEO Khalid Al-Falih. Sinopec, the largest producer and supplier of oil products in Asia, is already Aramco's top crude oil customer, according to Al-Falih. Sinopec Group chairman Fu Chengyu said the project propels the two companies' strategic cooperation and contributes to enhancing the partnership between China and Saudi Arabia. Al-Falih called the endeavor the latest chapter in a long history of cooperation, collaboration and trade between China and the Arabian Peninsula. The setting up of the refinery would promote economic development, said Shen Yamei, a researcher with the China Institute of International Studies. The deal was signed during Premier Wen Jiabao's six-day trip to the Middle East. He will fly to Abu Dhabi, capital of the United Arab Emirates, on Monday. Saudi Arabia, the only G20 member that is also a member of the Organization of Petroleum Exporting Countries, was the first leg of his visit. Beijing and Riyadh, strategic partners since 2006, agreed to boost bilateral relations during Wen's visit. The move reflected the two countries' "firm willingness to join hands in coping with challenges and safeguard common interests amid profound adjustments to global situations", Wen told Saudi Crown Prince Nayef bin Abdul-Aziz upon arrival in Riyadh late on Saturday. Wen, the first Chinese Premier to visit Saudi Arabia since 1991, said that both countries should expand trade in crude oil and natural gas and deepen their energy partnership. Riyadh is Beijing's largest supplier and the world's top exporter of crude oil. Imported oil accounted for 56.5 percent of China's total oil consumption in 2011, according to an earlier statement by Liu Tienan, director of the National Energy Administration. Beijing encourages Chinese companies to participate in Saudi Arabia's infrastructure construction such as rail, ports, electricity and telecoms, Wen said on Saturday. Nayef, who was appointed Crown Prince in October and is also Riyadh's deputy prime minister and minister of interior, said Saudi Arabia is willing to further cooperation across a wide range of areas, including trade, energy, infrastructure, culture, and security. Wen had a number of meetings on Sunday, including with the Saudi Arabian King and Prime Minister Abdullah bin Abdul-Aziz, Organization of Islamic Cooperation (OIC) Secretary-General Ekmeleddin Ihsanoglu, and Abdullatif al-Zayani, Secretary-General of the Gulf Cooperation Council. Wen called for an end to violence against civilians in West Asia and North Africa during the meeting with Ekmeleddin Ihsanoglu. Wen said China and the OIC shared common interests in safeguarding peace and stability in West Asia and North Africa, adding the OIC and the Arab League could play an important role in this regard. "This trip promotes the current strategic partnership between China and Saudi Arabia to a higher level," said Hua Liming, a former ambassador to Iran. With political turbulence in West Asia and North Africa, Saudi Arabia carries a great deal of influence, Hua said. China hopes to take this chance to boost good relations. Earlier on Sunday, Wen visited Abdul-Rahman Ali Al-Jeraisy, president of the Saudi Arabia-China Friendship Association. Abdullah Saeed Al-Mobty, chairman of the Saudi Chamber of Commerce and Industry, told Wen that trade cooperation should deepen between Beijing and Riyadh. Wen said that the two countries should be "long-term, stable" energy partners and that China will support infrastructure development in Saudi Arabia. Wen will address the Fifth World Future Energy Summit in Abu Dhabi on Monday. After meeting local leaders, he is scheduled to leave for Doha for the final leg of his Middle East visit on Wednesday. 

Hong Kong*:  Jan 17 2012 Share

John Slosar, chief executive of Cathay Pacific Airways, is excited about the introduction of two new classes of seat on flights - the long-haul and premium economy seats. In one important respect, selling a consumer a soft drink is no different to selling a passenger a business class air ticket - both transactions should leave the customer satisfied and wanting to repeat the experience. That is the view of John Slosar, chief executive of Cathay Pacific Airways (SEHK: 0293). That Slosar should liken the two is no surprise, since the Swire Group (SEHK: 0019) owns both the Hong Kong flag carrier he runs, and the Coca Cola bottling company on the mainland. And just in case anyone forgot it, playful Slosar would take his seat at every Cathay Pacific press conference behind a Coke, prominently on display on the desk in front of him. "The customer who bought a Coke yesterday may not necessarily buy a Coke today," said Slosar. "So we have to give people a reason for coming back to buy our products." The policy is certainly working in the case of the airline, since most of the business and first class seats on Cathay and its wholly-owned subsidiary Dragonair are occupied by repeat passengers. But there is a lot more to running an airline successfully than maintaining the loyalty of top-paying passengers. Nearly a year since taking up his post with the carrier, Slosar has taken the major initiative of introducing two new classes of seats - the long-haul economy seat and the premium economy seat. The long-haul economy seat was introduced to fix the existing hard-back shell seat in the economy class launched in 2007. Passengers complained about the lack of leg room and that they slid forwards on the seat. Slosar decided to replace the hard-shell seat in a 14-month retrofit programme that coincided with the installation of the premium economy seat class. New planes delivered this year will now fill in for the other planes in the fleet when they are retrofitted. There will be, at most, four aircraft down at the same time this year, compared with two in normal operating conditions. The first aircraft fitted with long- haul economy seats will enter service in March, initially on routes to Sydney and Toronto. A total of 36 Boeing 777-ERs and 26 Airbus 330-300s will be fitted and refitted by December 2013. "I would like to roll out the new products as soon as possible as the customers will be very excited about it," said Slosar. Cathay's new premium economy class is located in a separate cabin, and offers passengers an additional six inches of leg room, comfortably-reclining seats and a separate menu from the economy class. Prices will be 80 per cent to 200 per cent higher than ordinary economy fares. The highly-competitive Hong Kong-London route will be the first to offer the new seats from April 1. Fares would be HK$9,000 to HK$10,000 for a round trip, compared with a normal economy fare of HK$5,000, Slosar said. Meanwhile, Hong Kong Airlines' all-business flight to London will start in March. The Airbus 330-200 aircraft will have 86 cradle seats and 34 "lie flat" seats - the so-called Club Classic and Club Premium seats. Club Classic seats are priced at HK$16,640, between business and economy class, and will be in direct competition with Cathay's new premium economy seat on the London route. Club Premium seats will be priced at HK$33,640. Asian carriers had come a long way in upgrading the facilities by introducing fully flat-bed seats and promoting private space on board to make the journey more pleasant - even to the extent of being comparable to private jets, Slosar said. Cathay is one of the partners to the "trusted passenger" programme which is led by the International Air Transport Association. The programme allows frequent flyers to bypass the traditional security check-in at airports once they have gone through a vetting process by the government to identify them as trusted travellers. More than 19 countries are working on the trusted travellers programme before it goes truly global. Striking a balance between security and a smooth travel experience required comprehensive discussions between the governments, airports and airlines, said Slosar. He added: "I am sure that in the next few years something will show up."

A Hong Kong court has handed down a landmark ruling affirming that insurance brokers are entitled to receive commission from insurance firms without violating the bribery ordinance. However, the ruling may result in more insurance providers asking their brokers to secure their clients' consent to receive such commissions. It is currently not mandatory for brokers to obtain their clients' consent, although it is considered a good industry practice. Mr Justice Anselmo Reyes last week rejected claims from Jeremy Hobbins, group managing director at trading firm Li & Fung, who had sued his insurance broker Clearwater and insurance firm Royal Skandia Life Assurance. According to the judgment, Hobbins claimed that the investment-linked insurance products he bought did not perform as well as he had anticipated, and he wanted a refund as a result. Hobbins said although Clearwater had disclosed that it would be earning commission from insurers, it did not say how much commission it would earn from the policies. On that basis, Hobbins alleged that both Clearwater and Royal Skandia had breached the Prevention of Bribery Ordinance, or that the transaction was tainted by an underlying fraudulent misrepresentation. Hobbins sought a refund of his investment and the commission. The amounts were not disclosed in the judgment. But Reyes wrote in his judgment that brokers had a "lawful authority" in commercial practice to receive commission from insurers. "It has long been settled at common law that commission paid to an insurance broker by an insurer does not constitute an illegal secret profit unless it is in excess of what is normally paid within the insurance market,'' Reyes wrote. He added there was no evidence that the commissions that Clearwater received from Skandia or other insurance firms were higher than normal. Furthermore, Clearwater had informed Hobbins that it was receiving commissions, Reyes said. He also rejected the claims against Royal Skandia, saying Hobbins had signed declarations of understanding when he bought the life policies, which indicated that the broker could receive commissions. It was clear that Hobbins understood his rights when he signed the declarations, Reyes said. "To begin with, Mr Hobbins is far from being a babe in the woods in matters of financial investment," Reyes said. "Not only is he a highly respected and sophisticated businessman with numerous directorships, but he himself had previous dealings with financial advisers before engaging Clearwater." Robert Clark, a partner at law firm Deacons, who was representing Royal Skandia, said this was the first case in Hong Kong regarding the legality of insurance brokers receiving commissions. He said the ruling would ease insurance brokers' concerns about whether and how they could legally receive commissions. Reyes confirmed that the commission paid under the circumstances of this case did not breach the prevention of bribery laws. "But the judgment in this case also demonstrates that brokers should get consent from their clients before they receive commission, and that the amount must be normal for the industry," Clark said. He added that the insurance community would take care to ensure that they secure clients' consent to their commission arrangements, which would be best practice to do so. For instance, the Hong Kong Confederation of Insurance Brokers and the Hong Kong Federation of Insurers are seeking to ensure that such measures are taken, according to Clark. "The judgment would appear to be very good news for the broker community," said Glenn Turner, chairman of the city's Independent Financial Advisors Association. "Because of this ruling, more brokers should be encouraged to obtain consent from the client to be able to receive payment from the insurance companies, this being the industry best practice for brokers," Turner said. Even so, some insurance brokers have yet to obtain such consen t from their clients, insurers say. Of those who tried, some only received verbal agreements. On their part, some insurance firms request signed declarations from brokers of their clients' consent, or they ask the clients to sign similar declarations.

Hotel chain heiress Nicky Hilton was in Hong Kong for the first time last week but during her brief stay in town, she saw little of the city, other than from the window of her Ritz Carlton suite. The jade market was on top of Hilton's to-do list because she wanted to get her sister, Paris, some souvenirs of the trip, she said. Flown in for Japanese accessories brand Samantha Thavasa, the socialite was booked for media interviews, a store grand opening in Times Square and a celebration party in Ritz Carlton's Ozone bar. Hilton trotted down the runway with models from Japan and Hong Kong to showcase the bags at the evening party. She was surrounded by fans with their camera phones eager to get a picture. Stealing the scene, however, was HK model Marie Zhuge, who recently confirmed the rumours of her miscarriage. Adding to the limelight value, her tycoon heir fiance Ernie Sit also showed up at the party in support. "He's actually here to pick me up after the job. It's very sweet," Zhuge said. "[After what happened], Ernie's even more worried about me than I am for myself. "We talk on the phone for hours every day. He's always asking me whether I'm eating enough and what I'm feeling. I know he is my Mr Right."

The massive relocation of polluting factories in Guangdong to the banks of Hong Kong's main water source threatens to contaminate supply and pose a major danger to the city, think tank Civic Exchange has warned. Over the past three years, the authorities in Guangdong have sought to move polluting factories out of the Pearl River Delta area to make way for tertiary industries. Civic Exchange said many of those factories had decamped from places such as Foshan and Shenzhen to new sites along the Dongjiang, or East River, which supplies up to 80 per cent of Hong Kong's potable water. The Dongjiang originates in Jiangxi province, flows to Guangdong via municipalities like the city of Heyuan and is piped 70 kilometres to Hong Kong from Dongguan. "There were not many industries in Heyuan in the past and it was rich in water resources and rather clean," think tank chief executive Christine Loh Kung-wai said. "With factories having been moved in too fast and over-expanding without proper sewage works, the place has been polluted. In the long run, this will affect the quality of the Dongjiang water." Civic Exchange manager for Greater China Liu Su said that only a third of the 36 new industrial areas for the relocated factories - many of which were along the river - had central sewage treatment plants for the industrial estates. "The water contamination is very worrying ... Action has to be taken right away. We should not repeat the mistake of the Pearl River Delta and leave the ecologically more vulnerable areas of the province polluted." As part of a fact-finding mission for a report to be released today, Liu went on a two-week trip late last year to assess conditions along the river. The report also cites a research paper published last year by the Chinese Academy of Sciences' Environmental Earth Chemistry National Laboratory, which found that heavy metals such as cadmium, copper, tin, mercury and lead were in higher concentrations in the Dongjiang's sediment compared with the mainland's background concentration levels. The academy concluded that the ecological risk posed by these pollutants in the middle reaches near Huizhou , in southeast Guangdong, was high. In the lower reaches near Dongguan, it was extremely high. The Water Supplies Department said it had not read Civic Exchange's report so was unable to comment, but added that the Guangdong authorities had carried out a series of measures resulting in "significant improvement" to the Dongjiang water quality in recent years. The department operates an online analysis system at Muk Wu Pumping Station where Hong Kong receives Dongjiang supplies to ensure the quality complies with the World Health Organisation guidelines.

David Feldman says he has seen growing interest in philately in China in recent year - Hong Kong's stamps may be losing popularity with collectors and have dropped in value since the handover, but the city will remain a worldwide hub for philatelic trading, a world renowned expert says. David Feldman, who founded one of the world's leading philatelic auction houses under his name, said the drop in value was due to a lack of new collectors for the city's stamps since the return to Chinese sovereignty. "[Hong Kong] used to be one of the leading British Commonwealth collecting areas," Feldman said. "But ever since the handover there's been less interest for the British period, much less. Unfortunately, [the stamps] have become a little bit less popular." Although some enthusiasts abroad collected Hong Kong stamps to build up their China collections, the demand for the city's stamps had remained low compared with other Chinese stamps, Feldman said. He expected the value of Hong Kong stamps would fall further and "stay depressed" in the future. But this was unlikely to reduce the popularity of Hong Kong as a sales hub. "Hong Kong has always been the hub for philately in China and the China region, and it has also been a gateway to all the Asian countries," he said. The auction house set up its only office in Asia in Hong Kong in March last year, and expects the market on the mainland to grow. Feldman believed having an office in Hong Kong would be a more cost-efficient way to expand his business in Asia. The firm sold a stamp from the Cixi era of the Qing dynasty for more than HK$3.1 million in November in Hong Kong, and is holding another Chinese stamp auction in March. Feldman said he had seen growing interest in philately in China in recent years, but warned that the value of the stamps people were investing in now could be volatile in the future. "[The interest] has been particularly in regard to modern stamps. But that's not really a collector demand. It's rather a mixture between collector, investor and culture," he said. The 64-year-old Irish philatelist, educated in Dublin, started exchanging stamps with friends when he was eight. He began selling stamps three years later by placing adverts in comic books, and was only 20 when he held his first specialised Irish stamp auction. "I never collected. I was always in the business. For me it's an adventure," he said. "I am impassioned by [others'] interest in collecting."

People who join pyramid schemes could find themselves in court as well as out of pocket under a new law which took effect this month. Under Hong Kong's 30-year-old Pyramid Selling Prohibition Ordinance, only the masterminds behind pyramid selling schemes - in which participants hand over cash and must recruit more members in order to profit - could be prosecuted. By the time a pyramid scheme has collapsed, the mastermind has usually fled with the profits, but the new Pyramid Schemes Prohibition Ordinance, which took effect on January 1, makes anyone involved liable for prosecution. The new law also closes a loophole allowing people who ran pyramid schemes that did not involve the sale of goods or services to avoid prosecution. "As the principle behind a pyramid scheme is to exploit the naivety of the participants, it is likely that unsophisticated participants might find themselves losing their investments, as well as being prosecuted," said Joseph Kwan, a partner in law firm Deacons. "The fact that criminal liability is to be imposed on participants in pyramid schemes means that the public has the burden of assessing whether a scheme is legitimate." The new law imposes stiff penalties on anyone who tries to recruit others into a pyramid scheme. The maximum penalty has been increased from a HK$100,000 fine and three years in jail to HK$1 million and seven years. Courts will also be able to order perpetrators to compensate victims of the scheme. Kwan said companies engaged in genuine multi-level marketing should review their strategies to avoid falling foul of the scheme. Genuine multi-level marketing involves the sale of a legitimate product or service, such as insurance. Salespeople receive a share of sales by any other salesperson they recruit. In pyramid schemes, any reward is entirely or substantially based on the recruitment of new members. Any product or service offered will have little or no real value. "The law seeks to prohibit multi-level marketing schemes which do not involve a genuine underlying business," Kwan said. "There are, of course, risks to operators of genuine multi-level marketing schemes, who might find their schemes falling within the scope of the revised definition of pyramid scheme. "A genuine scheme should avoid a substantial link between the reward and the introduction of new participants. The link should be between the reward and the sale of genuine goods and/or services." But Professor Henry Fock Kwong-yin, a marketing expert at Baptist University, said the new law could help restore confidence in multi-level marketing. And he said he hoped the stiff penalties would encourage victims of pyramid schemes to report the situation to authorities, rather than recruiting more members in an attempt to make good their losses. "In most cases, before the scheme breaks the mastermind [behind it] will have run away." Records show that there were 10 complaints about suspected pyramid schemes between 2007 and September of last year, with 27 people arrested. Due to insufficient evidence, none of them were prosecuted.

Hong Kong may be a special administrative region, but Shenzhen residents see it is a special shopping zone, with a quarter of the Guangdong city's residents crossing the border more than once a month last year, a poll found. A Shenzhen trade association in conjunction with a local consulting firm surveyed 2,100 people last year, finding that 27 per cent had visited Hong Kong specifically to shop - nearly three times the figure for 2010. While most mainlanders need to obtain a permit for each entry, Shenzhen residents can come and go with ease under the multiple-entry scheme introduced in 2009. Among those polled, 25 per cent said they had been to Hong Kong more than once a month last year. Many were highly educated, earning on average more than 10,000 yuan (HK$12,300) a month. Fifty-five per cent of shoppers said they bought clothes and footwear, while 30 per cent bought cosmetics or simply came for groceries. About 15 per cent bought jewellery, tobacco or liquor, according to the survey cited by the Guangzhou Daily. Products sold in Hong Kong are generally viewed by mainlanders as more reliable, especially those for infants, and there is greater variety. "People going to Hong Kong to buy soy sauce has become a hot topic on the internet," the paper said. In recent years, mainlanders packing grocery stores or pharmacies with their shopping baskets have become a common sight, both in border areas, such as Sheung Shui in the New Territories, and in retail centres such as Mong Kok. But this influx has triggered complaints from some local residents, who say Hong Kong's streets have become more crowded, and that the demand from across the border has made supplies of some commodities unstable. However, tourists from the mainland play a vital role in the growth of the tourism and service sector. An average of 61,551 mainlanders visited Hong Kong every day last year, an increase of 27 per cent over the figure for 2009, according to the Immigration Department. Each overnight visitor from the mainland is estimated to spend HK$6,511 per trip. Gao Haiyan, a government academic studying big cities, told the paper the flow of locals shopping elsewhere was not likely to hurt local businesses. "Although it is increasingly popular to go shopping in Hong Kong, it will not have an impact on commerce in Shenzhen because when you add up transport costs and the time it takes for travel, it is still more convenient to buy things in Shenzhen," she said. Immigration chiefs are expanding self-service, electronic immigration checkpoints at the border to make it easier for the hundreds of thousands of frequent mainland travellers to cross the border into Hong Kong. The e-channels allow travellers to bypass counters and one-on-one scrutiny by immigration officers

A scheme to ease the manpower shortage at public hospitals with the help of private doctors has been declared a "failure" just four months after its launch. The scheme was set up by private doctors opposed to the Hospital Authority's plan to hire foreign medics to fill some of its 200 vacancies. Doctors who want to take part say the authority has been too slow in allocating duties, while the work offered has been unsuitable. But they, in turn, have been accused of trying to "cherry pick" jobs and turning down duties that fail to meet their expectations. "The scheme is a failure," said Medical Association president Dr Choi Kin, who blamed a lack of flexibility by the Hospital Authority. "We have already received complaints from many doctors that they have been waiting for four months without hearing any reply. "Those doctors who have the goodwill to help public hospitals are feeling [left out]." Since the scheme's launch in September, only 30 private doctors have been assigned duties. A further 100 were still waiting, said a Hospital Authority source. The doctors are expected to be paid market rates, but some have offered discounts. Dr Paul Shea Tat-ming, a specialist in geriatric medicine, signed up for the scheme last month, but had to turn down an invitation to work at Sha Tin Hospital. "It is not cost-effective for any doctors to spend hours in traffic between the New Territories and Central, where most specialists run their clinics," Dr Shea said. He said the authority should have arranged for private doctors to assist at hospitals closer to their clinics. Another private specialist refused to travel from his clinic in Kowloon to take up work at Tuen Mun Hospital that he considered unsuitable. "I could not afford the time to travel for two hours to Tuen Mun to see patients for a few hours," he said. "And as a specialist [in family medicine], I have not been seeing patients with flu and coughs for many years [so] it is quite embarrassing for me to take up this kind of post." Public-sector colleagues reacted angrily to the private doctors' comments and accused them of running a public relations exercise in an effort to keep foreign doctors out of the city. One senior professor of medicine said the private sector recruits were more trouble than they were worth. "They should not be choosy about their duties," the professor said. "To me, their move is more about banning overseas doctors from working in Hong Kong and posing a threat to their careers." Another senior public doctor holds the same view. "The Hospital Authority is trying to recruit younger staff [from overseas] who are not going to compete with local trainees but be more involved in less specialised but labour-intensive and time-consuming aspects of patient care. "I cannot really see local private practitioners coming back into the Hospital Authority and rolling up their sleeves to do [such work]." He poured scorn on concerns by private doctors about the competence of overseas recruits. "I would be as concerned, if not more concerned, about the competence of some of the local private-sector specialists than the overseas ones," he said. Public hospitals saw 5.3 per cent of their doctors depart last year, up from 4.4 per cent in 2010. The figure is expected to increase further as more doctors reach retirement age. The authority needs 200 new staff to cover the loss, with shortages most acute in anaesthesia and oncology departments, as well as accident and emergency. Only nine overseas doctors have been hired so far. A Hospital Authority spokesman said it needed to carefully assess applications from private doctors. "It is hard to [match applicants to work] and it takes time," he said.

 China*:  Jan 17 2012 Share

China Gas, jointly managed by Eric Leung Wing-cheong, underwent a board reshuffle last year after an alleged embezzlement scandal at the company. Like a phoenix rising from the ashes, China Gas has emerged as a target of a takeover battle in the wake of controversial corporate governance practices in the past year or so. The battle for control of one of the mainland's largest privately owned piped gas firms, took an unexpected turn after a London-listed, Hong Kong-based rival, Fortune Oil, jumped into the fray by teaming up with the former managing director of China Gas, Liu Minghui. The Fortune Oil alliance surfaced about two weeks after a consortium composed of China's second-largest oil firm, Sinopec (SEHK: 0386), and China Gas' smaller rival, ENN Energy, launched an unsolicited US$2.2 billion offer to take over China Gas on December 12. China Gas, which has a market capitalisation of HK$16.26 billion, is back in the spotlight after a run of media headlines in December 2010. They concerned a power struggle in the boardroom that led to Liu's arrest and detention by the police in Shenzhen on alleged embezzlement of the group's assets, and a subsequent board reshuffle in February last year. The Sinopec-ENN consortium is bidding to create China's largest piped-gas firm, vying for the No1 position in terms of gas sales held by Hong Kong and China Gas (SEHK: 0003) - or Towngas. ENN plans to combine its 100 piped-gas projects with China Gas' 151-strong portfolio. Liu's role in the Fortune Oil alliance fuelled uncertainty over the Sinopec-ENN bid. An informed source said Liu (pictured), the founding shareholder of China Gas and a core architect in building the company from scratch about 10 years ago, was released on bail in Shenzhen in November after being detained for almost 11 months by Shenzhen police. "He is flying around the mainland to resume contact with local acquaintances," the source said. "He can't leave the mainland, so his return road will be through his joint venture with Fortune Oil." A source close to the China Gas board said it was not feasible for Liu to return to the board at this stage partly because the investigation by Shenzhen police was continuing. Liu was ousted from the board a year ago for failing to perform his fiduciary duties. He has not asked to return, so far. Fortune Oil, which supplies gas on the mainland and is listed on the London stock exchange, surprised the market by setting up a 50-50 joint venture with Liu on December 30. Liu injected 4.56 per cent of China Gas shares into the joint venture at HK$3.50 each, while Fortune Oil contributed cash and 94.04 million China Gas shares, or 2.15 per cent of the issued share capital. This valued the joint venture at HK$700 million. Together with his personal interest of 3.5 per cent in the gas firm, Liu and Fortune Oil - deemed to be "parties acting in concert" under the Securities and Futures Commission takeover code - emerged as the single-largest minority shareholder of China Gas with a combined interest of 10.56 per cent. "We will keep buying China Gas shares on the market and have no intention to sell our stake," a senior executive at Fortune Oil said anonymously on Friday. "We do not intend to swallow the company, but we want friendly co-operation with China Gas." Fortune Oil, which has operated oil and gas supply and infrastructure in Beijing, Liaoning, and Shenyang for 20 years, wants to leverage China Gas' distribution network in 150 cities to meet its ambition of covering all aspects of the supply chain for liquefied natural gas. It is attracted to China Gas' deep penetration into natural gas refilling stations for vehicles, with 112 stations on the mainland. "China Gas has built such an intricate distribution network in the past 10 years that replication is not viable financially and geographically," the Fortune Oil source said. "It is not viable to compete alone against other big boys like China Resources (SEHK: 0291) Gas and Towngas." Both sources said they had not yet had any discussions on possible co-operation in gas supply on the mainland. China Gas joint managing director Eric Leung Wing-cheong declined to comment. The Sinopec-ENN offer raises intriguing issues. During a recent marketing tour of China Gas, institutional investors often asked why state-controlled Sinopec had teamed up with an outsider to take over the gas firm, in which it has held a 4.79 per cent interest since 2004, according to a source close to China Gas. Investors are also baffled as to why Sinopec took a minority 45 per cent stake in the joint venture with ENN to launch the takeover bid, which will give it a minority interest in China Gas if the bid is successful. The China Gas board, composed of representatives from substantial shareholders such as GAIL of India, SK Group, and Oman Oil, criticised the offer as "wholly unsolicited" and "opportunistic", and said it "failed to reflect the fundamental value of the group". While the Sinopec-ENN consortium remains silent on the offer, a substantial shareholder of China Gas is quietly buying shares in the stock market to fend off the consortium's interest in the company. Chey Tae-won, through his units SK Gas and SK E&S of South Korea, raised his stake in China Gas to 7.04 per cent on January 4 from 6.09 per cent on December 30, based on filings to Hong Kong Exchanges and Clearing (SEHK: 0388). The purchases, at prices between HK$3.576 and HK$3.685 a share, effectively rejected the Sinopec-ENN cash offer of HK$3.50 for each China Gas share. The offer price now looks meaningless since the price of China Gas shares has soared 32.5 per cent to HK$3.71 since the December 12 offer, which was at the time a 25 per cent premium to the share's close on December 6 before trading was suspended. The offer was also at a 40.1 per cent premium to the average close in the 30 trading days before that date. There is other bad news for ENN as credit rating agencies Moody's and Standard & Poor's threatened to downgrade its credit rating to junk last month. Brokers said the rises by China Gas shares since the December offer pointed to the gas company being underpriced. "The pork is too fatty to let go," investment firm Lyncean Holdings managing director Francis Lun Sheung-nim said. "It is one of the most interesting merger and acquisition battles in recent years." UBS, which last Thursday recommended a "buy" on the stock with a target price of HK$4, said the offer price must be raised if it was to be successful. However, some analysts expected that Sinopec and ENN are unlikely to raise the price until obtaining clearance from government authorities such as the Ministry of Commerce regarding potential anti-competition issues. On top of this, the pair must meet a number of pre-conditions including approval by ENN minority shareholders in an upcoming shareholders' meeting before proceeding with a formal offer.

Rejuvenating ties: Premier Wen Jiabao waves as he stands next to Nepal's prime minister, Baburam Bhattarai, at the airport in Kathmandu. Premier Wen Jiabao pledged more than US$140 million to impoverished Nepal yesterday during talks in Kathmandu marking the first visit in a decade by a leader of the world's second-largest economy. Wen and Prime Minister Baburam Bhattarai discussed investment from Beijing for infrastructure projects that could amount to billions of dollars, while signing a deal for a 750 million yuan (HK$922 million) loan to be paid over three years. "Prime Minister Wen's official visit to Nepal has become a great success and it has been instrumental to taking the friendly relationship between Nepal and China to a new height," said Deputy Prime Minister Narayan Kaji Shrestha. Wen offered US$20 million to help Nepal's peace process and almost US$2 million for the country's police forces, Shrestha said, adding that "the message of this visit is that China has attached a great importance to Nepal". Local media had reported ahead of the delayed visit that Nepal would seek US$5 billion for an international airport in its second city, Pokhara, three large hydropower stations in the west and improvements to its creaking rail network. Shrestha said China was "positive towards the requests" without revealing if it had promised any cash. Wen was also expected to seek support for Beijing's policies in the region of Tibet, which has seen a wave of self-immolations over the past year in protest at Chinese rule. Nepal, home to 20,000 Tibetan exiles, is under pressure to stem the flow of Tibetans fleeing from their homeland. Hundreds make the difficult and dangerous journey to neighbouring Nepal every year, fleeing what they say is political and religious repression in China, though their numbers have fallen sharply in the past few years. More than 200 Tibetan exiles had been arrested in the past few days for illegally entering the Himalayan republic, Nepali police said, as part of a security crackdown in the capital. "Both Taiwan and Tibet are integral parts of the Chinese territory," said a joint statement from the two governments released after the visit. Nepal "firmly supports" China's efforts to uphold "state sovereignty, national unity and territorial integrity" and did not allow anti-China activities, the statement added. Former premier Zhu Rongji was the last Chinese leader to visit Nepal, in 2001, although recent years have seen a flurry of visits by Chinese delegations. "This is the highest-level visit from China to Nepal in more than 10 years. It will be an important platform to strengthen the relationship between the two countries," said Tanka Karki, a former ambassador to Beijing. Wen paid a courtesy call to President Dr Ram Baran Yadav before departing - just five hours after arriving - for the Middle East on a trip to key oil-producing nations. Wen had been due to visit Nepal last month but the trip was cancelled over security concerns. Analysts say that while India has traditionally been the influential player in Nepal, China is making huge inroads in the country, which is recovering after the end in 2006 of a decade-long civil war that killed 16,000 people.

Workers install the world's largest hydroelectric turbine with a generating capacity of 800 megawatts at Xiangjiaba Dam on Saturday in Hubei Province. The dam on the Jinsha River, a tributary of the Yangtze River, may start generating power to the grid this year.

While the auto world descends on Detroit, luxury car maker Rolls-Royce is drumming up attention on the other side of the world: China. The luxury brand, which is owned by German car giant BMW, said earlier this week that it sold more cars in 2011 than ever in its history, thanks in large part to China, which overtook the U.S. in 2011 as the largest market for the pricey vehicles. And while most of the world’s car makers are showing off new models at the Detroit Auto Show, Rolls-Royce’s top management are on a media tour in Asia to tout its hottest market. China now makes up about 30% of Rolls-Royce’s world-wide sales (3,538 last year) — impressive considering that Rolls-Royce only entered the market in 2003, and Western luxury rides in China cost nearly double what they do in the U.S. because of high import duties and luxury taxes. “China has emerged so quickly. We are very pleased,” said Torsten Müller-Ötvös, Rolls-Royce’s chief executive, in an interview in Hong Kong. He pointed out that sales in Greater China, which includes Taiwan and Hong Kong, grew almost 60% last year. The top-selling Rolls-Royce dealerships are now in Beijing and Shanghai, both of which now outsell the historic leading showrooms in Beverly Hills and London. Mr. Müller-Ötvös added that Hong Kong has emerged as the city with the highest concentration of Rolls-Royces in the world. So who’s buying these cars? “The captains of industry and self-made entrepreneurs who are highly educated, who went to schools in foreign countries, and who are now rewarding themselves,” he said. In China, he said, the buyers are typically between 30 and 40 years old, a younger age than the typical buyers in other countries. Rolls-Royce has also tailored its offerings for the Chinese market. It first launched its extended wheelbase Phantom — a car that is a few inches longer than the regular Phantom model — to respond to Chinese demand for roomier, chauffeur-driven cars. It also launched a line of limited-edition cars celebrating the upcoming Year of the Dragon, fitted with touches such as embroidered dragons on leather headrests. The special cars, which were priced at over $1 million, are alreadly sold out. “Once you want to be driven in the most comfortable and luxurious way, you will want a Rolls,” said Mr. Müller-Ötvös. “It’s like riding a magic carpet.” And to many rich Chinese, it’s a rug that they’re more than willing to buy.

China’s voluble and unpredictable Internet population largely praised Taiwan’s weekend election process over the weekend, adding to a growing online discussion on the subject of democracy. The Saturday presidential election – in which incumbent Ma Ying-jeou held off an unexpectedly tough challenge from opposition leader Tsai Ing-wen – was the first to take place in Taiwan since the rise in China of Twitter-like microblogs known as weibo. Weibo services run by Sina Corp. and Tencent Holdings Ltd. have become conduits of instant news and commentary in a country where the media are still heavily regulated, challenging the authorities’ hold on information. Over the weekend, the election was the most-discussed topic on Sina Weibo. “Peace and democracy,” Pan Shiyi, chairman of property company Soho China Ltd. and a high-profile microblogger, wrote on Sina Weibo. Hu Xijin, editor of the nationalistic Global Times newspaper, said Mr. Ma’s victory was “a rational result, the rationality of democratic Taiwan as well as the rationality of mainland power.” Investor Wang Gongquan, who has more than a million followers on Sina Weibo, compared the Taiwanese election with China’s more-restrictive system. “Given that the mainland can’t have opposition parties and still keeps stability through violence, repression and political persecution of dissidents, my heart is filled with compassion,” he wrote. The discussion echoed one that began last month, when a famous blogger named Han Han stirred debate and angered political activists by arguing that China isn’t ready for democracy. While some local governments in China hold elections, the national political process is strictly controlled by the Communist Party. “From the Taiwan election result, we can tell that as long as the recent government’s performance is not too bad, the public won’t care too much,” said one Weibo user who gave the name Chen Qiulei. Another user with the name Chen Liaoyu criticized the official media’s praising of the victory of the pro-Beijing Mr. Ma. “This morning I’ve found so many official commentaries saying the election result shows that mainland economic development is right. Are you kidding?” the poster wrote, adding, “It’s like saying your neighbor married a pretty wife because you look cute.” Others lauded both candidates. “Ma and Tsai have very high standards and qualities,” wrote a microblogger named Healthy Happiness. The blogger added, “even though Tsai lost, she kept her manners and she was very stylish. I admire Taiwan.”

A Chinese commercial vessel was attacked by unidentified gunmen Saturday evening on the Mekong River in Laos, sources with a joint patrol command said on Sunday. The Shengtai-11 was returning from Thailand to Guanlei Port in Xishuangbanna prefecture of southwest China's Yunnan Province when it encountered gunfire. None of its crew were injured. The attack occurred on a section of the Mekong River that runs through Laos. The river is a major regional transportation route shared by China, Laos, Myanmar and Thailand. Laos police arrived on the scene by land to search for the suspects, while police forces from China and Laos used a Chinese patrol vessel to arrive at the scene and handle the situation. Chinese police on Saturday started a second joint patrol with their counterparts from Laos, Myanmar and Thailand in order to maintain security along the Mekong River. International transport on the Mekong River fully resumed after the four nations' law enforcement agencies conducted a joint patrol on December 10 and stepped up cooperation to ensure the safety of the river. Passenger services on the river were suspended for four months after tourists were robbed in the river's "Golden Triangle" area in August. Shipping services were also halted after 13 Chinese sailors on two cargo ships were killed in the area on October 5.

Hong Kong*:  Jan 16 2012 Share

Rising prices have meant some extra fetching and carrying work for pupils at Cheung Chuk Shan College. The school is setting up a stall in Victoria Park for the Lunar New Year fair for the fifth year in a row. But instead of hiring a company to bring their supply of soft toys and inflatable goodies over the border from the mainland, the pupils did it themselves. And on Monday, 70 Form Five pupils will haul the bags from their hilltop school in Tin Hau to Victoria Park. Business teacher Szeto Suet-ping said the cost of supplies and services had risen by about 30 per cent. "We used to pay for a moving company, but it is too expensive now," Szeto said. "We also didn't pay for a company to bring our supplies down from the mainland this year. "Every pupil had to take two trips together to Guangzhou equipped with two big bags and one backpack." But the experience seems to have been a valuable one for the pupils. Pupil Gary Yu Hau-tang said: "I didn't realise that how we pack and label our supplies was so important ... we don't have time to dig through boxes to replenish our stall. It was a very complicated task." The team has also received advice from pupils who have run the stall in previous years. "The older pupils have taught us how to make display cases out of used boxes to help us cut costs and also be environmentally friendly," Yu said. "They also taught us to wrap the cases with colourful wrapping paper to draw people's attention." Fellow pupil Natalie Chan Lai-yee said she expected dealing with customers would be one of the big challenges for the stallholders. "We will have to face customers of different ages and economic backgrounds, and we will learn how to sell to different types of people through quickly assessing what kind of person they are. We would not usually encounter so many different types of people at once." Szeto said she had urged her pupils to learn the prices of the dozens of products they would be selling as a way to deal with some mean-spirited customers. "In the past, some pupils have told customers the wrong prices, and were then accused of lying," she said. "So now, we urge the pupils to memorise the prices." The main product will be a neck pillow with a cartoon dragon designed by the pupils. The pupils must earn at least HK$110,000 to cover costs - but they will be able to split any profits they make.

Some flowers at farms in Yuen Long bloomed two weeks before the Lunar New Year festival after winter was less cold than predicted. Flower shoppers will have to pay up to 50 per cent more and settle for less attractive blooms during the Lunar New Year holiday - and some growers are blaming weather forecasts. They say mistakes in the Observatory's forecasts have led them to plant flowers on the wrong schedule, leading to lower yields. Traders estimate the price of flowers such as the Chinese blossom, chrysanthemum and narcissus will be up to 50 per cent higher than last year. The Observatory said its winter forecasts had been accurate and denies any responsibility. Fung Ching, 74, has been growing flowers for more than 40 years. He said peach blossoms at local and mainland farms bloomed two weeks before the festival after the winter turned out to be milder than predicted. He said farmers removed leaves early in expectation of a cold winter that would have inhibited the development of the flowers. Farmers pick the leaves to divert nutrients to the flowers so they open earlier. "We heavily rely on the modern science of weather forecasting," said Fung, who owns Choi Lee Nursery in Yuen Long. But an Observatory spokesman said the seasonal forecast for this winter from December to February, had been accurate so far. Last month was colder than usual with a monthly mean temperature of 16.9 degrees Celsius, 0.9 degrees below the typical December mark of 17.8 degrees. There were six days with a daily minimum temperature of 12 degrees or less in the month, about two days more than normal. The Observatory predicted early last month that this winter would be cooler due to the La Nina weather pattern. Fung said he had received about 200 orders for peach flowers ahead of the festival, but said the trees were not as tall, nor as attractive, as in previous years, despite price rises. Fung, who also buys chrysanthemums for resale, estimated that the supply of flowers in full bloom for this year's festival would be halved, while prices for consumers would rise by 25 to 30 per cent. At Yiu Kee Gardens, a farm in Shek Kong, owner Lee Yiu said tangerine trees would be 30 per cent more expensive than last year. "There was not enough rainfall last year and that affected our harvest," Lee said. But there was still strong demand for narcissus, he said, despite prices 40 per cent higher than last year. Sunny Lai Wing-chun, chairman of the Wholesale Florist Association, estimated that flower prices would be 50 per cent higher than last year.

The Yau On Pawn Shop in Tai Po paid over HK$3 million for a 16-carat yellow diamond in 2010. A New York institute says it was stolen. A Hong Kong pawnbroker is embroiled in an international dispute over the ownership of a 16-carat diamond that was allegedly stolen from a London jewellery shop in a heist more than four years ago. Danny Hung Shui-wang, a businessman speaking on behalf of the Yau On Pawn Shop, based in Tai Po, said the firm "will not give up" its fight for ownership of the gem, for which it paid more than HK$3 million and which is now being held by a gem-grading laboratory in New York. Hung said a private person, whom he described only as Chinese, had sold the diamond to Yau On in November 2010. "We have followed all necessary procedures," Hung said yesterday. "We are doing normal business. If there is some problem overseas, of course we don't want any losses." According to a lawsuit filed in Manhattan by Graff Diamonds last week with the Supreme Court of the State of New York, the 16-carat yellow diamond was stolen during an armed raid on one of the company's London outlets in July 2007. Sam Hung, a director at the Yau On pawn shop, told a US reporter that he was not aware the diamond had been stolen. "When I received the diamond, I had documentation about where I bought it but I had no method of knowing the source [of the diamond]," he said. "But we did pay for it - we're a pawn shop. We are now negotiating. My lawyers said maybe we could come to a compromise about how much we need to pay to get it back before the court case starts." According to the New York court documents, Yau On Pawn Shop is "not a good faith purchaser and/or buyer of the diamond in the ordinary course of business", and Graff is seeking its immediate return. The diamond is being held at the Gemological Institute of America in New York - a non-profit organisation that grades and identifies jewels - where Yau On had taken it for certification. The institute, which certified the diamond before the 2007 robbery, determined that the pawn shop had presented the same gem stolen in London, even though it had been recut, according to Graff's lawsuit. Graff told the New York court that the diamond was acquired for less than its fair market value and that Yau On should therefore have been aware that it was being sold in violation of the true owner's rights. The institute is retaining the diamond pending a resolution of the legal dispute, according to the court documents. Yau On's pawnshop, in a Tai Po shopping centre, was open for business yesterday but sales assistants refused to answer questions. Danny Hung insisted: "I have a certificate for the diamond. The certificate is dated October [2010]." He also said he possessed the identification documents of the person who had sold the diamond to Yau On, but had not been approached by either local or overseas police. Hung said the seller of the diamond claimed to have bought it from another party. The stone was allegedly among several stolen in a July 2007 hold-up at Graff Diamonds' branch in London, when a pair of well-dressed men stepped out of a Bentley Continental Flying Spur, pretended to be shoppers and chatted to sales assistants before brandishing handguns and stealing diamonds and gem-studded rings, necklaces, pendants and earrings, according to reports. In 2010, Yau On lost a legal battle to recover in full the money it had advanced for two gold necklaces that were later found to have been stolen from Chow Sang Sang Jewellery, the Hong-Kong based chain. The pawnshop and jeweller had to split the redemption value of HK$39,500 for the necklaces. Hong Kong police regularly update pawnshops on a list of stolen properties reported in the city. But, according to Hung, the list would not include items stolen overseas. Hong Kong police could not immediately comment on the case yesterday, while an e-mail sent to the office of the lawyers for Graff Diamonds was not answered. The gem institute in New York said it could not discuss the matter because of the dispute but noted that it regularly works with law enforcement when stones are reported lost or stolen.

Jacky Cheung, famous singer from Hong Kong, China, performs on stage during his "Half Century Concert" world tour at Rogers Arena in Vancouver, Canada, on Jan. 13, 2012.

Ma Ying-jeou, 61, the incumbent Taiwan leader and chairman of the ruling Kuomingtang, declares his victory in the island's leadership election yesterday in Taipei, Taiwan. Ma extended appreciation and gratitude toward his supporters at a large gathering held in the KMT headquarters in Taipei amid a heavy rain. The crowd echoed with thunderous cheering when Ma shouted on the stage, "Congratulations to your all, we win!" Ma Ying-jeou, the incumbent Taiwan leader and chairman of the ruling Kuomintang (KMT), declared his victory in the island's leadership election Saturday evening. Ma extended appreciation and gratitude toward his supporters at a large gathering held in the KMT headquarters in Taipei amid a heavy rain. He attributed the victory to the policies his team has made to fight corruption and maintain peace. Taiwan people showed their recognition of the efforts KMT has made to shelf disputes with the mainland and maintain peace across the Taiwan Strait, he said at the gathering. At a press conference at the opposition Democratic Progressive Party (DPP) headquarters, Ma's major rival Tsai Ing-wen admitted her failure in the election and announced that she would resign from the post of DPP chairwoman. Ma and his running mate Wu Den-yih, who is incumbent chief of the island's executive authority, got more than 6.89 million ballots, or 51.6%percent of the votes, whereas major opposition Democratic Progressive Party (DPP) chairwoman Tsai Ing-wen and her running mate Su Jia-chyuan, got more than 6.09 million ballots, or 45.6 percent of the votes. People First Party (PFP) chairman James Soong and his running mate Lin Ruey-shiung got more than 369,000 ballots, or 2.8 percent of the votes, according to the island's election organization. A spokesperson of the Taiwan Affairs Office of the State Council delivered a speech after the Taiwan leadership election, saying that the facts over the past four years have indicated that the peaceful development of the Cross-Strait relations is a correct road and has obtained support from a majority of Taiwan compatriots. "We sincerely hoped that the Taiwan society could be stable and people live a happy life." "We are willing to join hands with Taiwan's all walks of life on the basis of continuing to oppose the 'Taiwan independence' and sticking to the '1992 Consensus', to break new ground for the peaceful development of the cross-Strait relations and make common efforts for the great rejuvenation of the Chinese nation."

 China*:  Jan 16 2012 Share

Victoria Azarenka of Belarus and Li Na of China with their trophies after yesterday's final of the Sydney International. Victoria Azarenka ended Li Na's unbeaten two-year run at the Sydney International with a fighting three-set victory in the final yesterday. The Belarusian third seed claimed her ninth career WTA title with a 6-2, 1-6, 6-3 victory over the fourth seeded mainland star in one hour and 56 minutes at Ken Rosewall Arena. French Open champion Li was on a nine-match winning run in Sydney, after beating Kim Clijsters in last year's final, but was edged out by Azarenka, who is ranked third in the world behind Caroline Wozniacki and Petra Kvitova. Despite her victory, Azarenka will remain at No 3 in the world, while Li is expected to drop a place to sixth behind Australian Samantha Stosur when the next rankings are released on Monday. Li, who beat Kvitova in Thursday's Sydney semis, nevertheless heads to Melbourne in form after a dip in the second half of last year following her landmark French Open success, which saw her become the first Asian to win a grand slam title. "Now, I am feeling I have more confidence. Now, why should I worry? Nothing to worry about," Li said. "I think now it's much, much better than last half-year. Still step by step." Azarenka broke Li's service three times to storm through the opening set of yesterday's final in 34 minutes, but encountered greater resistance in the second set after Li called her coach and husband Jiang Shan to the court and her play tightened up significantly. She broke Azarenka's serve in the fourth and sixth games, and levelled the match when the Belarusian pushed a backhand wide. Both players shared service breaks at the start of the final set. But when Li's serve was broken in the eighth game, Azarenka served out for the championship, winning on her second match point. "I think we showed incredible tennis out there," Azarenka said. "Li Na is always very dangerous and she proved it today. I'm just glad I could overcome and win this match." Li could face Wozniacki in the quarter-finals in Melbourne following yesterday's draw for the season-opening grand slam. Li also has defending champion Clijsters, third seed Azarenka and the dangerous Agnieszka Radwanska in her top half of the women's singles draw. She plays Ksenia Pervak of Kazakhstan in her opening match. Clijsters beat Li in last year's Australian Open final before the Chinese star went on to take the French Open at Roland Garros, in the process making history as the first Asian grand slam winner. "For me, playing Li Na in the final last year was one of the fun finals and one of the best finals that I've played so far in a grand slam," Clijsters said yesterday. "It was a really tough match, we both played well in a close match, and winning it gave me a lot of confidence and I was able to show the people here my best level and fight for it, and there were a lot of emotions involved. "For Li Na there was a lot of outside pressure from her country and a lot of expectations, and I was happy to see her do well in Europe in the summer," the Belgian added. In the men's draw, Roger Federer and Rafael Nadal are in the same half of a grand slam for the first time in seven years. Defending champion Novak Djokovic has world No 4 Andy Murray in the top half, while Nadal and Federer - ranked second and third, respectively - were placed for the bottom half. It is the first time since the 2005 French Open that 16-time grand slam champion Federer and 10-time major winner Nadal have been pitted in the same half of a grand slam draw. Djokovic, who won three of the four grand slams and five Masters titles in a remarkable 2011, begins his Australian Open title defence against Italy's Paolo Lorenzi. Nadal and Federer will start against qualifiers, while two-time finalist Murray takes on American Ryan Harrison.

While the age of Shanghai bridegrooms dipped a fraction in 2011 compared to 2010, brides were tying the knot slightly later than in the previous year. According to the latest report by the Shanghai Civil Affairs Bureau, last year, the average age of men marrying was 32.4 years old - about 0.04 years younger than that in 2010. This dip follows several years in which the average age of bridegrooms increased. And in 2011, the average Shanghai bride was 29.9 years old, 0.1 years older than in the previous year. Officials said women with a high education background and salary seem to have trouble finding Mr Right as they want a similar man, narrowing options. And while Shanghai men are happy to marry women from out of town, many Shanghai women restrict their choice to local men, narrowing their options further. According to the report, "transprovincial" marriages increased dramatically last year. About one third of the Shanghai people marrying wed a partner from out of town - up 12 percent on 2010. More than 70 percent of those Shanghai natives finding partners from outside the city were men. Women said marrying an out-of-towner would be frowned upon by their family. "My mother is afraid that I will leave her for somewhere else," said 28-year-old Barbara Li. "So every man she tries to introduce me to is from Shanghai." The number of people finding overseas partners fell. Some 2,225 Shanghai people married people from 70 countries and regions, down 0.5 percent on 2010. And officials said while the number of divorces rose 4 percent last year, new marriage counselling services were helping couples. Last year, 145,870 couples tied the knot in Shanghai - up 15 percent on 2010. Officials said this peak will continue for a couple of years as many of those born in the 1980s baby boom tie the knot.

China's Ministry of Commerce received 203 antitrust filings in 2011, up 49 percent year-on-year, and launched investigations into 185 cases, a rise of 57 percent, a senior official said Friday. The ministry's anti-monopoly bureau reviewed 168 cases last year, up 53 percent year-on-year, and imposed conditions on four cases, Vice Commerce Minister Gao Hucheng said at a national work conference. The bureau has reviewed 382 cases, approved 371 cases, blocked one and imposed conditions on ten since the country's Anti-Monopoly Law took effect in 2008, Gao said. He said the bureau will work to promote the country's economic restructuring in 2012, while strengthening publicity for anti-monopoly laws and enhancing law enforcement.

Hong Kong*:  Jan 15 2012 Share

Strong demand for flats in The Coronation in West Kowloon is due, property analysts say, to keen pricing and its proximity to the express railway to Guangzhou now under construction rather than a sea-change in buyer sentiment. "It is unlikely that the strong sales achieved at The Coronation will extend to other areas," said Eric Yuen, head of research at Dao Heng Securities. "The brisk sales we saw there over the New Year holiday period were due to its location and attractive pricing strategy and not a turnaround in sentiment." David Chan, director of estate agency Ricacorp, echoed this view. An absence of positive news and the approach of the Lunar New Year, when sales are slow, would keep most potential buyers on the sidelines for the rest of the month, he said. Sino Land, the leader of the consortium building The Coronation, said that by Monday it had sold 550, or 74 per cent, of the project's 740 flats. They went on sale on December 29. The project will be completed by the end of this year. Being close to the Hong Kong-Shenzhen-Guangzhou express rail line, slated for completion in 2015, the project had an edge over rivals when it came to attracting investors and mainland buyers, said Yuen. More importantly, sales were boosted by the consortium's low pricing strategy, which saw the first batch of 50 flats released at an average price of HK$13,688 per square foot, about 9 per cent below the average asking price of HK$15,000 per square foot for flats being resold at the nearby Sorrento housing project, close to Kowloon Station. Subsequent batches of flats were offered at gradually rising prices, and the sellers have achieved an average price of HK$15,000 per square foot. Further evidence of this discounting strategy came last week when a consortium led by Sun Hung Kai Properties (SEHK: 0016) (SHKP) was forced to lower asking prices for a third time at its 334-unit Chatham Gates development at Hung Hom. On December 15 the developers published a price list for 51 flats at an average asking price of HK$16,118 per square foot. That compared with secondary-market prices in the area of between HK$5,500 and HK$6,400 per square foot. Poor buyer interest prompted it to withhold the launch of the first batch and instead publish a price list for a second batch at a reduced average price of H$11,972 per square foot. Once again lacklustre interest prompted it to withhold this second batch from sale and publish a third price list for another batch of flats last week at prices averaging just HK$10,418 per square foot; the cheapest flat in the batch was priced at HK$8,838 per square foot. Thirty-five of the 50 flats in this batch have sold. Batches one and two have not been re-released for sale. In the secondary market, meanwhile, 110 sales agreements were signed in the 50 housing estates monitored by estate agency Ricacorp in the week from January 1 to 8. This was a 3 per cent increase from the 108 units sold in the previous week. The average home price, as tracked by The Centa-City Leading Index, was down 1.25 per cent for the week to January 1, the steepest weekly fall since July last year. Buoyed by the strong response for its flats in West Kowloon, Sino Land said it would continue releasing the remaining flats for sale.

Volkswagen, Europe's largest carmaker, said its sales on the mainland and in Hong Kong climbed 18 per cent last year to a record, led by deliveries of Lavida and Sagitar and demand for Audi luxury cars. The VW group, which also owns the Skoda and Bentley brands, sold 2.26 million vehicles in the two markets, the carmaker said. General Motors, the biggest foreign carmaker on the mainland, increased sales in the nation by 8.3 per cent last year to a record 2.55 million vehicles. Volkswagen is counting on the world's most populous nation to drive growth in emerging markets as it seeks to surpass GM and Toyota Motor for the global sales crown. China is now the largest market for its eponymous marque, premium Audi brand and Lamborghini supercars. "Although we expect tougher conditions for the car industry to come, we want to maintain our leading market position in China," said Karl-Thomas Neumann, chief executive of VW's China operations. "We see a great potential for an expansion in China's rural areas where millions of people will benefit from better mobility." The mainland's car sales slowed last year, trailing growth in the United States for the first time in at least 14 years, after the government ended stimulus measures and as the nation's economic expansion showed signs of easing. Growth in vehicle demand is expected to accelerate this year to about 9.5 per cent, or about 15.87 million units, from the 5.2 per cent pace last year. Car sales rose 33 per cent in 2010 and 53 per cent in 2009. The German carmaker sold 1.72 million of its main Volkswagen brand cars in China, an increase of 14 per cent from a year earlier. This amounts to 34 per cent of the brand's global deliveries of 5.1 million vehicles last year. Audi, the group's luxury nameplate that competes with Daimler's Mercedes-Benz and BMW, increased sales on the mainland and in Hong Kong by 37 per cent to a record 313,000 vehicles last year, the company said yesterday. It became Audi's largest market globally last year. Audi boosted deliveries of imported cars such as the Q7 sport-utility vehicle and the Audi A8L. The carmaker also sold more domestically produced A4L and A6L cars, whose wheelbases were extended to meet the needs of chauffeur-driven Chinese buyers. VW, which has joint ventures with FAW Group and SAIC Motor, was the first foreign carmaker allowed to produce cars on the mainland. The company has said it would add a seventh factory on the mainland as part of plans to invest €14 billion (HK$139 billion) to expand production and models by 2016.

Consumers are generally not singing the praises of the investment market, with people in Hong Kong, the mainland and Taiwan less optimistic in the last quarter. Hong Kong consumers had even less confidence in the financial markets in the last quarter than people on the mainland, Taiwan or Macau, but they were more optimistic about their household expenditure, according to a consumer confidence survey. The study by six universities in the four areas showed that the consumer confidence index (CCI) for investment markets fell to 70.5 in Hong Kong, 74.9 on the mainland and 78 in Taiwan, while the figure in Macau rose slightly to 75.5 from the previous quarter. The index peak is 200, with 100 being neutral. The figures indicate that consumers are pessimistic about their local stock markets, as the Hang Seng Index benchmark, the A-share index in Shanghai and the Taiwan Stock Exchange Weighted Index plunged 15 to 27 per cent during the past six months. "The stock market in Hong Kong was not the worst performer last year, but Hongkongers were the most pessimistic in the region," said Dr Geoffrey Tso, of the City University of Hong Kong. "That's possibly because the market in the city is more closely connected with those in Europe and the United States. The ongoing European credit crisis has been a big concern for investors and consumers in the city." The survey also found that high inflation was worrying consumers in all the areas surveyed. The CCI index for prices was 57.4 in Hong Kong, 70.1 on the mainland, 50.7 in Taiwan and 57.7 in Macau - far below the neutral 100 points. However, consumers in Hong Kong and the mainland believed they were capable of dealing with the financial pressures of daily expenditure. The CCI for household expenditure stood at 111.7 on the mainland and 104.2 in Hong Kong, while in Macau it was 95.5 and 70.4 in Taiwan. The CCI statistics released yesterday are separate from those issued by the China National Statistics Bureau each quarter. The six universities have jointly released the index since 2009. On the mainland, they are Renmin University of China, Central University of Finance and Economics and Capital University of Economics and Business. Others that take part are City University of Hong Kong, Macau University of Science and Technology and Fu Jen Catholic University in Taiwan. The researchers poll 1,000 to 3,000 people in each region through random telephone interviews every quarter, asking for their views on economic prospects, employment, prices, quality of life, flat purchases and investments. According to the study, people's outlook on the overall economy was pessimistic, with readings of 90.4 on the mainland, 79.3 in Hong Kong, 86.9 in Macau and 71 in Taiwan.

A deep bow, a sincere smile and a warm handshake have helped Taiwan's first lady, Christine Chou Mei-ching, capture the hearts of many from both sides of the political fence. Chou has become the island's equivalent of former US first lady Laura Bush, who was popular with both Republicans and Democrats while her husband, George W. Bush, was struggling to improve his low approval rating during his second presidential term. In many areas she visits, Chou has to spend more than two hours to walk a route that would normally take 10 minutes, such is the crush of fans trying to get a glimpse of her. Supporters shouted "Sister Mei-ching", "Auntie Mei-ching" and "Go, go, go, Chou Mei-ching" when she began a campaign trip on January 2 to canvass support for the re-election of her husband, President Ma Ying-jeou. Ma is engaged in a tough fight with his major challenger, Dr Tsai Ing-wen of the pro-independence Democratic Progressive Party. The race is so close that no one is certain who will win. Enthusiastic supporters welcomed Chou when she campaigned recently at a traditional market in Keelung, in northern Taiwan - the bastion of Ma's mainland-friendly Kuomintang party. "I just shook hands with her, I just did," shouted a female vendor as Chou gently shook hands with people who had flocked to see her. While Ma is generally snubbed and regarded with suspicion by the DPP, which accuses him of trying to sell Taiwan out to the mainland, many of its supporters still respect Chou. When campaigning in southern Taiwan - the traditional stronghold of the DPP - she usually receives a warm welcome from the party's supporters, although there are inevitably some disapproving voices. Why does Chou - to all appearances a rather ordinary woman, with straight short hair and no make-up - merit such widespread support? "It is all because of her modesty, sincerity, friendliness, good behaviour and her long devotion to promoting public welfare and care for minority groups," political commentator Chou Tien-ruei said. Her unique charisma reflected the admiration of various social sectors, he said. "It may not be a fairy tale to say that supporters give Ma their ballots all because of her," he said. Pundits and the Taiwanese media agree that another explanation for her popularity is the fact that she knows her place and never seeks to meddle in crafting policy for her husband, unlike her predecessor Wu Shu-chen, who has been convicted of corruption along with her husband, former president Chen Shui-bian.

Gilbert and George's latest work will be premiered at the Central gallery. A British art gallery is to set up shop in Hong Kong, taking the city another step up as a fast-rising international art market. London-based White Cube confirmed it would open its first overseas branch in Central in March, joining the likes of Sundaram Tagore Gallery, Gagosian Gallery and Ben Brown Fine Arts, which have all established a branch in the city over the past few years to cultivate Asian art collectors. "Hong Kong is on the culture map and a place where artists are interested in showing their works," said Graham Steele, director of White Cube Asia. He described Hong Kong as the gateway to a greater region, including not just mainland China but also the rest of the Asia-Pacific from Southeast Asia to Australia. White Cube, which represents a number of contemporary artists including Antony Gormley, will occupy upmarket new premises at 50 Connaught Road Central from March 2. The 550 square metre gallery will span two floors and a ceiling of 4.5 metres high - a rarity for Central gallery spaces. As its inaugural show, it is planning the world premiere of Gilbert and George's London Pictures, touted as the "largest series of work by the artists to date". The British duo will attend the opening. Steele admitted the size of White Cube's Hong Kong location was unusually large compared with many other galleries in the city. "We are not opening a space for the sake of selling works," he said, adding that the British gallery hoped to change the cultural landscape by bringing a new dialogue to this part of the world. Art critic Oscar Ho Hing-kay said White Cube would further establish Hong Kong's status in the high-end art market.

Stephane Quazzola with his dog Sahil. He has lost his job in Hong Kong and has to give Sahil away. ''This is heartbreaking for me,'' he said. The impact of the world's economic struggles is filtering all the way down to Hong Kong's dogs, as departing expatriates hand over their pets to charities that may never be able to find them a new home. Hong Kong Dog Rescue says it has seen a big influx of dogs belonging to expatriates, many working in the financial sector, who are being forced to leave the city after losing their jobs or are being relocated. The Tai Po-based charity's founder, Sally Andersen, wrote on its blog this week that surrender applications - requests to hand a dog over to the charity - were "flooding in" from expatriates. With 400 animals already looked after, the charity is struggling to cope. Other charities reported similar problems. Hong Kong Dog Rescue usually receives 10 surrender requests a week. On one day this week, three expats who were leaving the city made such requests. One involved a six-month-old black puppy called Crumble, which had been adopted from the charity six months earlier. "We try so hard to make people understand that this is a life-long commitment," Andersen said. "They always say `yes', but when something happens, the dog goes." In its latest employment report, recruitment agency Hudson reported that 14 per cent of employers in the city expected to reduce headcounts in the next year, a much higher proportion than in any other industry. "This is not an attractive outlook," said James Carss, the company's executive general manager for Hong Kong. Carrs, who owns three rescued dogs himself, said people gave up their pets for a variety of reasons. "Some people realise the dog needs much more attention than they thought, but for others it can be an act of desperation." Stephane Quazzola is in the latter category. The Frenchman arrived in Hong Kong in November 2010 to work for Ipac, a unit of insurer AXA, and adopted his dog Sahil from a Society for the Prevention of Cruelty to Animals kennel in Wan Chai early last year. But in November his company decided to close its Hong Kong branch and he lost his job. He will move to Thailand, his wife's home country, next month. "I looked everywhere in Bangkok to find pet-friendly apartments or houses, but most of the time they don't want animals," Quazzola said. "I do not want to bring him to Thailand and realise that I will have to get rid of him." He has posted an advertisement on a website for expatriates in the hope of finding a new home for Sahil, but fears he may have to take him to a kennel. "Had we decided to go to another country, we would have obviously brought Sahil," said Quazzola, who chose Sahil after the dog leaped onto his wife's lap at the kennel. "This is heartbreaking for me," Fiona Woodhouse, deputy director at the SPCA, said she had previously seen an increase in pet surrender requests in the weeks leading to the Lunar New Year. In the first two weeks of this month, the SPCA received 49 surrender requests. Seven cited departure as a reason. Jacqui Green, the founder of Pals, a Lantau island-based animal charity, said that for the past 12 to 18 months, up to a third of animal surrender requests were made by people leaving Hong Kong. "Have the owners lost their job? Are they relocating to another country? No one can be sure what the real reason is," she said. Andersen urged owners to explore ways of taking their dogs with them when they leave. She said popular breeds like golden retrievers had a good chance of finding a new home, but mongrels like Sahil and Crumble were not so lucky. "For mongrels, it can take years to find a home. For some it is never," she said. "Some owners come in and want to make a donation. Money may ease the guilt, but it does not save 15 years of a dog's life."

Hong Kong's antigraft agency formally charged a managing director at Deutsche Bank AG with accepting bribes totaling $3.2 million linked to the trading of derivative warrants issued by the German bank—nearly a year after his arrest. The Independent Commission Against Corruption says Ma Sin-chi, 37 years old, took bribes from four stock investors—who have also been formally charged by the agency—as rewards for giving advice on the trading of the derivative warrants. The charges follow an ICAC investigation into potentially fraudulent trading that led to the arrest in April of 11 people in Hong Kong, including Mr. Ma and the four others. Warrants are leveraged financial instruments that offer holders the right to buy or sell an underlying asset at a set price. Derivative warrants are issued by third parties such as investment banks, which aren't related to the entity issuing the underlying assets of the warrant, and are traded on an exchange. The products are extremely popular in Hong Kong, which has one of the world's largest markets for derivative warrants, and particularly among retail investors. They are heavily marketed by investment banks through advertisements on television and radio. Investors are attracted by the prospect of gaining from moves in the underlying asset without paying the full value of that security. Heavy trading in a warrant can influence investors to pile into the product to ride its momentum, opening the door to possible foul play. In 2010, two former warrant traders at Macquarie Bank Ltd. in Hong Kong were imprisoned for false trading in warrants issued by the bank between 2004 and 2005, in order to earn commission rebates of about 1 million Hong Kong dollars (US$129,000). That led the Securities and Futures Commission to ban commission rebate programs on trading derivative warrants. The ICAC said Mr. Ma and the four investors were bailed to appear at Eastern Magistracy on Thursday. Acting Principal Magistrate David Dufton adjourned the case to April 24 pending further inquiries by the ICAC, the agency said. The agency also said Deutsche Bank and Hong Kong's Securities and Futures Commission have given their full assistance during the investigation. "This is a personal matter for Mr. Ma. There is absolutely no suggestion of any wrongdoing by Deutsche Bank. We do not have details of ICAC's case against the individuals and cannot comment further," said Michael West, a Deutsche Bank spokesman. A person familiar with the situation said Mr. Ma had been suspended from his duties at the bank since his arrest. Mr. Ma couldn't be reached for comment.

Outraged internet users targeted Dolce & Gabbana's flagship Tsim Sha Tsui store again last night, and are planning another protest tomorrow unless the Italian fashion giant apologises for banning Hongkongers from taking photographs there. A handful of protesters took photographs outside the store in Canton Road last night after responding to calls on social networking website Facebook. More people are expected to attend tomorrow's protest, exactly a week after 1,000 people besieged the store in another protest organised online. A protester left a can of dog food outside the store, while another showed an iPad with the slogan "Dog & Garbage" on it. "We just want them to apologise," said Chu Po-fang, an 18-year-old student. "If they do not respond, we will protest again." Chu, who had joined Sunday's protest, said the protesters did not want to ruin the store's business. "We are not breaking the law. We have the right [to take pictures in public spaces] and Dolce & Gabbana has infringed Hongkongers' freedom," said Jose Leung, 21, who works for an interior design firm. About 10 police officers were present outside the store last night, putting up fences to prevent protesters from blocking the street. The protests began last week amid reports that a security guard at the store - part of the Harbour City shopping complex - had told Hongkongers that only foreigners and mainlanders were allowed to take photographs there. Harbour City issued an apology blaming the incidents on poor communication, saying that the guards were acting on the tenant's requests. However, a video widely circulated online of a security guard outside the Dolce & Gabbana store ordering reporters not to take photographs has further stoked the controversy. "Don't take the photograph. For the last time, I will break this camera!" the guard was heard to have said as he tried to cover the camera lens with his hand. A woman who claimed to be a staff member at the store was forced to apologise after describing the protesters as "mentally retarded" in a post on her Facebook page. On Wednesday, the Equal Opportunities Commission said it had sent a letter to Dolce & Gabbana's Hong Kong office demanding an explanation. The firm was unavailable for comment last night. It had denied discriminating against Hongkongers and said it was not responsible for reported "controversial statements".

 China*:  Jan 15 2012 Share

The Canton Fair in Guangzhou is the mainland's largest trade event - these traders are trying to find a recipe for success in front of a display of brightly-coloured frying pans. Commerce vice-minister Zhong Shan expects a record-breaking number of buyers and exhibitors at the Canton Fair, the mainland's largest trade show. But he warned of "more challenging and complicated" prospects for global trade this year. The 111th session of the twice-a-year China Import and Export Fair - as it is officially known - will be held in Guangzhou from April 15 to May 5. It aims to attract more buyers from developing countries as the mainland's two largest markets, the European Union and the United States, slip into economic turmoil. Zhong said yesterday in Hong Kong this year's global trade would be very tough and complicated as the European debt crisis was "deepening". "Global demand will be sluggish, competition will intensify and protectionism will arise," he said. "This will have an immense negative impact on the world and bring uncertainty to developing markets." However, he expected that fast-growing demand in developing markets would make up some of the weakened demand in developed regions. Canton Fair, which started in 1957, is the most established trade show on the mainland and serves as an indicator for the nation's exports. Economists from HSBC, Daiwa Capital Markets and UBS said the euro-zone debt crisis and wobbly US consumer demand would drag down China's exports into single-digit growth in the first quarter of this year. The fair's autumn session last October/November drew a record of 209,175 buyers, 1 per cent higher than the spring session in April/May, and breaking deals worth US$37.9 billion, 3 per cent above the spring session. More buyers from the 10 members of the Association of Southeast Asian Nations, Africa, Russia and Latin America are due to attend. Asian buyers accounted for 45 per cent of the total at the autumn session. Mainland exports last year to Asean leapt 23.1 per cent, total trade with South Africa surged 76.7 per cent and shipments to Brazil gained 34.5 per cent.

The number of applications for U.S. visas that were processed in China and Brazil in the first quarter of the fiscal year 2012 increased more than 50 percent from the same period last year, the U.S. State Department said Thursday. In China, U.S. consular officers adjudicated nearly 260,000 visas in China in the first quarter of fiscal year 2012, which lasted from October to December 2011, compared to 175,000 in the same period in fiscal 2011, an increase of 48 percent. In Brazil, nearly 280,000 visas were processed in the period, compared to 171,000 in fiscal 2011, an increase of 63 percent, the department said in a statement. The sharp increase in visa processing resulted from the initiatives taken by the State Department to greatly reduce the wait time for visa interview in China and Brazil, two of the fast-growing economies in the world. In China, visa interview wait times have been reduced to only two days at any of five U.S. visa-processing posts. In Brazil, wait times have been reduced to 15 days in Rio de Janeiro and six days in Brasilia, the capital city. To meet increasing demand for U.S. visas, the U.S. State Department is deploying additional personnel, expanding visa sections, and utilizing new systems and technologies to facilitate legitimate travel without compromising national security. As visitors from China and Brazil represent a growing market for travel and tourism to the United States, the remarkable growth in visa processing signals good news for the U.S. economy, the statement said. Every additional 65 international visitors to the U.S. generate enough exports to support an additional travel and tourism-related job, the statement said.

Nightclub owner Qiao Zhibing with Zhang Enli's painting 'The Poor' Alan Lee, who runs Beijing gallery Asia Art Center, says one of his clients, a fitness-equipment manufacturer named Chang Chiu Dun, calls himself the "Cover Killer" because he "likes to buy artworks that have been on the covers of auction catalogs." The downside, Mr. Lee says, is that this influx of newly wealthy collectors is fueling risky speculation on art, leading to price swings and heavy trading volumes for younger artists like the eyeball painter, Ji Dachun, whose lasting significance is still uncertain. Art advisory firm Artvest says Chinese investors have recently started at least eight art funds, which buy artworks with the aim of reselling them at a profit later. There are only about 20 similar funds elsewhere in the world. China's gallery scene is similarly freewheeling, with collectors such as Mr. Yang sometimes serving as stakeholders or co-owners of galleries where they also shop. Such arrangements can spark potential conflicts of interest because the stakeholders might be able to leverage their position to claim the gallery's choicest pieces. Seven years ago Mr. Yang paid to help his wife open her contemporary art gallery, Aye, but he says he doesn't manage her artists or get first dibs on any work she shows there. He recently stepped back as a financing partner in another contemporary art gallery he founded three years ago, Eastation, in order to focus on his wine venture. He continues to buy art from both galleries. 

Art's New Pecking Order - Picasso and Warhol are being outsold by Chinese painters as a new wave of wealthy buyers reshapes the global market. Inside China's high-rolling art world. Yang Bin, one of Beijing's biggest car dealers, is a major collector of Chinese art. On the outskirts of Beijing in a private club house called Paradise, there is a large, windowless room where Yang Bin displays his collection of modern and contemporary art. "Sit down and get ready," Mr. Yang recently told a few friends visiting from Taiwan. Grabbing a remote control, he turned to a set of wall panels that, with a click, began to slide apart. Each panel revealed a few of his recent acquisitions, from Chairman Mao-era portraits of revolutionaries to brightly colored abstracts by China's rising stars. As his friends applauded the slide-show, Mr. Yang grinned and lit a cigar. The art market is being transformed by Chinese collectors willing to pay top dollar for everything from Ming vases to contemporary Chinese abstracts. In some cases, these works are outstripping prices paid for blue-chip Western artists like René Magritte and Clyfford Still. Three of the 10 most expensive art works sold at auction last year were by Chinese artists, according to art-market analyst Artprice. Last year's priciest painting: "Eagle Standing on Pine Tree" (1946) by self-taught painter Qi Baishi. This delicate scroll rocketed ahead of colorful canvases by Pablo Picasso, Roy Lichtenstein and Andy Warhol when it sold for $65 million at auction house China Guardian in May. Overall, purchases by Chinese collectors accounted for roughly a fifth of Christie's global sales during the first half of last year; Sotheby's says mainland buyers also lifted its sales in Asia to nearly $960 million last year, up 47% from 2010. Welcome to China's rollicking art world, a marketplace flush with wealthy entrepreneurs who are amassing art at a clip to rival any Russian oligarch. From Beijing to Chongqing, collectors are building private museums, opening galleries and embracing an exuberant art scene, even as China's economy shows early signs of a slowdown and many collectors elsewhere are buying more cautiously. Mr. Yang, age 54 and one of Beijing's biggest car dealers, is emblematic of the new wave of Chinese collectors: Over the past decade, he has collected nearly 1,000 artworks by contemporary heavyweights like Chen Yifei, who paints women in romantic interiors, and Zhang Xiaogang, known for haunting family portraits. Mr. Yang's art choices are closely tracked by the region's top collectors and dealers. He has financed the opening of a pair of edgy art galleries in Beijing, one of which is managed by his wife, Yan Qing. Last year he began importing and reselling collectible wines like Bordeaux. (He keeps most of his own 30,000-bottle collection stored in a cellar outside town.) he collectors in his broader circle include Qiao Zhibing, a nightclub owner based in Shanghai. Mr. Qiao is outfitting his four-story karaoke bar, Shanghai Night, with conceptual sculptures by Ai Weiwei, sleek photographs of Champagne-drinking partygoers by Yang Fudong and paintings of men in suits and smiling face masks by Zeng Fanzhi. Behind Mr. Qiao's cashier's desk looms Beijing artist Ji Dachun's large painting of an eyeball. Another friend, Beijing hotelier Zhang Rui, has started decorating every room in his new Gallery Hotel with pieces borrowed from a gallery called Tang. He also has an 800-piece collection of his own. The hotel hasn't opened yet, in part because Mr. Zhang recently spent 18 months in detention for allegedly bribing a Party secretary. Mr. Zhang denies making any bribe but says he did pay a fine as a condition of his release last June, and he's now seeking the remaining building permits. "It's not enough in China to be wildly wealthy," says Meg Maggio, director of Pékin Fine Arts, a Beijing gallery specializing in contemporary art. "For all these guys, it's about building a beautiful way of life—they want the nice objects, the good wine, the whole package." 

US business leader urges closer ties with China - The United States should advance economic ties with China to reduce the adversarial nature of the relationship between the world's two largest economies, the head of the US Chamber of Commerce said. "Our country should make a major effort to attract global investors," said Thomas Donohue, president and CEO of the chamber. "Foreign investment already supports 5 million direct jobs and millions of indirect jobs. We need to negotiate more bilateral investment treaties ... India and China should be high on that list," Donohue said during his annual State of American Business speech on Thursday. He said that the improvement of the US economy is too weak to put the nation back to work and the organization expects economic growth of 3 percent by the end of the year. But in the current fierce presidential election campaign, criticism of China about its currency and military growth has raised concerns and opposition from Beijing. Last week, the new Pentagon strategic review named China, along with Iran, as potential threats to US security. Analysts warned that relations are facing a very difficult year with political transitions in both countries and several geopolitical challenges, such as the South China Sea, the Korean Peninsula and Iran. The chamber, which represents the interests of more than 3 million US companies and industry associations, will continue to strengthen trade ties with China, Donohue said. "If we are advancing our economic relationships, then there is going to be less concerns about the adversarial relationship but more about cooperation to deal with the geopolitical issues in the region and around the world. We need to do both, but let's put more energy into the trade and investment side," he said at a news conference after the speech. John Ross, an economist and a visiting professor at Shanghai Jiao Tong University, said the US government and the Federal Reserve require Chinese cooperation to deal with key issues in the international economy. "If they do not receive such cooperation, negative economic consequences will be felt in the US," Ross said. Last year, China appreciated its currency about 12.5 percent against the US dollar after purchasing power of the two currencies is factored in. The two countries have moved closer on the currency issue, the trade deficit between the two is becoming closer, and exports to China are growing, he said. Despite this, "it appears that whether it's Republicans or Democrats, whether it's the House or the Senate, especially in the current presidential race, everybody seems to have something to say to China. It's like checking the box, that if I say something bad about China, I would be tough on that", he said. As China has 1.3 billion people, a massive growth of the middle class and tremendous opportunities for US companies, "we should continue vigorous and strong exchanges with China to protect our interests and advance our economy", he said. Though there is a round of China bashing among Republican presidential candidates - such as Mitt Romney's tough position on the Chinese currency and foreign policy - many experts agree that neither foreign policy nor China will become a central issue in the election. Wang Haifeng, director of the International Cooperation Center affiliated with the National Development and Reform Commission, said Sino-US trade should not be seen as political chips for either the House or Senate. "It is purely an economic issue, and steady growth of bilateral trade will benefit both," Wang said. Philip Levy, adjunct professor of international and public affairs, Columbia University, said what politicians said during campaign may not reflect what they really thought. "Where you stand is where you sit," Levy said. US President Barack Obama was very tough on the Chinese currency when he was a Senator, but his administration has done a good job by not labeling China as a currency manipulator, Levy said. "If Romney is elected as US president, it is hard to tell whether he will keep his hard line with new constraints."

Hong Kong*:  Jan 14 2012 Share

The mainland's gold imports from Hong Kong surged to a record in November as consumers bought the metal before the Lunar New Year this month and investors sought to hedge against turmoil in financial markets. The mainland bought 102,779 kilograms from Hong Kong in November, up from 86,299 kilograms in October, according to the Hong Kong government's Census and Statistics Department. Gold demand is climbing on the mainland as rising incomes and concerns about inflation bolster purchases, with the country overtaking India in the third quarter as the largest gold jewellery market, according to the World Gold Council. It is also the world's biggest producer. "China's appetite for gold is very strong and growing," said Tao Jinfeng, chief investment consultant at Haitong Futures Co, the mainland's largest brokerage by registered capital. "The few months before the Lunar New Year is typically the peak demand period for Chinese people." Imports were profitable as prices in Hong Kong mostly traded at a discount to those on the mainland in November, according to Bloomberg data. Gold for immediate delivery of 99.99 per cent purity on the Shanghai Gold Exchange was at 334.35 yuan (HK$411.1) a gram yesterday, compared with HK$408.20 at the Chinese Gold & Silver Exchange Society. "There is always the possibility that some purchases were made by the central bank," said Tao. The People's Bank of China last made known its gold reserves more than two years ago, announcing that it held 33.89 million ounces, or 1,054 tons, as of June 30, 2009. This is the world's fifth-largest holding by country, according to World Gold Council data. Central banks and governments bought 142 tons in 2010, International Monetary Fund data show. Gold climbed 10 per cent last year, rallying for an 11th year, as central banks joined investors in buying bullion to diversify assets. South Korea, Thailand, Turkey and Russia were among those who added gold to reserves in 2011. Bullion for immediate-delivery in London, which reached a record US$1,921.15 an ounce on September 6, gained 0.6 per cent to US$1,642.82 an ounce by 3 pm yesterday.

The government’s HK$6,000 cash handout has helped bolster Hong Kong’s 18-year reign as the world’s freest economy but the introduction of a statutory minimum wage put a slight dent in the ranking, according to a conservative US think tank. According to the Index of Economic Freedom jointly published by the US-based think tank Heritage Foundation and the Wall Street Journal on Thursday, Hong Kong scored 89.9 out of 100. This was well above the world average of 59.5 – and 0.2 points higher than last year. Terry Miller, director of the Heritage Foundation’s Centre for International Trade and Economics, said government handouts were not generally considered a good thing for economic freedom “but in the case of Hong Kong, we saw a return to the taxpayers of some of the revenue that had been previously collected”. He said there was a question over the intent of the policy. “I’m not sure we know what happened, but we would certainly always regard the lessening of the tax take from the population ... as a good thing.” Singapore was ranked second in the index, the position it has held since 1995, with Australia and New Zealand rounding out the top four. The mainland came in at 138th with a rating of 51.2, down 0.8 compared to last year. The foundation said the drop reflected a worsening performance in business freedom and government spending. China is ranked 30th of 41 countries in the Asia–Pacific region, and its overall score is lower than the global and regional averages.

Shares of Sa Sa International Holdings (SEHK: 0178) rose more than 8 per cent to the highest in four weeks after the cosmetic products distributor posted strong growth in revenue for the quarter ended December. The stock rose as high as HK$4.64, the highest since December 12. At 10.10am, the shares were up 7.2 per cent at HK$4.60, outperforming a 0.51 per cent gain in the Hang Seng Index. In a filing to the Hong Kong bourse, Sa Sa said turnover rose 28.9 per cent year on year in the fourth quarter of last year to HK$1.81 billion (US$233.03 million), and same-store sales at its Hong Kong and Macau operations grew 20.7 per cent. “Looking ahead, the group remains cautiously optimistic on the Asian retail sector,” said Chairman Simon Kwok in a statement. “Although there may be cyclical downturns along the way, the overall prognosis for the cosmetics retail sector is positive based on rising affluence in the region, in particular mainland China.” For the nine months ended December, turnover climbed 31.2 per cent to HK$4.59 billion, with same-store sales growth at 22.7 per cent.

Taiwan's president, Ma Ying-jeou greets supporters in the coastal city of Yilan yesterday. Analysts say the US hopes for his re-election but could live with a Tsai Ing-wen win. As it pushes ahead with its mission to strengthen its presence in Asia against a backdrop of economic uncertainty at home, the United States is making a concerted effort to ensure that the status quo is maintained in Taiwan. Ahead of Saturday's presidential election on the island, the administration of US President Barack Obama has not explicitly stated whether it prefers incumbent president Ma Ying-jeou or his main rival, Dr Tsai Ing-wen, but a series of moves in recent months have suggested Washington wants Ma to stay in office - an outcome Beijing would also welcome, as it would probably help damp down cross-strait tensions, according to analysts. "I have been monitoring Taiwan's presidential elections for more than two decades and found that US intervention in this coming election is inevitable," said Professor Edward Chen I-hsin, who teaches American Studies at Taiwan's Tamkang University. He added that the US wants to ensure that Ma, of the Kuomintang party, wins. US involvement in the election has come under scrutiny after the American Institute in Taiwan, America's de facto mission on the island, announced last month that Taiwan had been nominated for inclusion in the United States' visa-waiver program. The institute's acting director, Eric Madison, sought to downplay links between the announcement and the election, saying Taiwan only recently completed the statutory requirements. But analysts said Tsai's Democratic Progressive Party (DPP) has been pushing for a visa-free arrangement with the US for years, and were sceptical of the explanation. "Actions such as announcing only a few weeks before the election that it is about to approve visa-free entry to the US for Taiwan can only help Ma and the Kuomintang," said Dr June Teufel Dreyer, a political science professor at the University of Miami. "So while they say they are not intervening, of course they are intervening." Top US officials rarely visit Taiwan in order to avoid triggering an adverse reaction from Beijing. However, in a high-profile visit last month, US Deputy Secretary of Energy Daniel Poneman held talks with Ma and said in a speech that the US wants a broader bilateral partnership with Taiwan. Before Poneman, the chief of the US Agency for International Development, Dr Rajiv Shah, also visited the island. However, Professor Arthur Waldron, who teaches international relations at the University of Pennsylvania, said the most striking intervention by a US official came in the form of an unattributed quote made to the Financial Times on September 15. The official said Tsai had left the Obama administration with "distinct concerns" about her ability to handle cross-strait relations. Although the American Institute in Taiwan later sent five officials to celebrate the DPP's 25th anniversary, some analysts say the US is telling Taiwanese politicians what to do. "This is something that the US does not normally do with other countries," Waldron said. Analysts said the US had learned a lesson from former Taiwan president Chen Shui-bian, who often angered Beijing with his efforts to achieve Taiwanese independence. Although the US positions itself as Taiwan's chief defender and sells arms to the island, Washington is aware that any drastic change to the island's politics may lead to confrontations across the strait which might embroil it in conflict with Beijing. "The US was nice to Chen Shui-bian when he first took office, which was reflected by its arms sales in 2001. But the US lost trust in Chen in later years, and the Obama administration won't believe in the promises made by Tsai," Chen from Tamkang University said, alluding to Tsai's pledge not to adopt a radical stance towards Beijing. Analysts have also said Washington fears Beijing would be less willing to bow to US warnings and quicker to resort to coercion against Taiwan if the DPP returns to power and takes provocative measures. Stable cross-strait ties are seen as conducive to US designs on taking a stronger hold in Asia. The economic situation in the US is another reason Washington does not want trouble in Asia. "Washington does not have the time to worry about possible chaos in Taiwan," Chen said. Despite concerted efforts by the US to maintain the status quo in Taiwan, analysts say Washington would make do if Tsai is elected. "I don't think anyone in Washington worries that Dr Tsai would do anything rash," Dreyer said. "I think Washington would congratulate Dr Tsai on her election, say they will be delighted to work with her and proceed to talk with her about what they see as a reasonable future course for Taiwan."

With the presidential election just two days away, more than 180,000 Taiwanese businesspeople on the mainland are preparing to return to the island to cast what they believe will be crucial votes. In the closely fought race between incumbent President Ma Ying-jeou and chief challenger, Dr Tsai Ing-wen of the Democratic Progressive Party, some businesspeople believed Ma needed every vote he could get to stay in office, trade union officials said yesterday. "My understanding is that many Taiwanese business associations based on the mainland have plans to send their members back to Taiwan before Saturday's vote, and the number of returnees should top 180,000 or even 200,000," said Yeh Hui-teh, spokesman for the Association of Taiwanese Businessmen on the mainland. He said that more than 3,000 Taiwanese businessmen in Beijing had already booked flights back to the island, six times the number who did so for the 2010 municipal elections. "The race is so close that many businessmen, originally not planning to return, have decided to fly back to Taiwan for the vote," Yeh said. Asked whether those businesspeople were worried about Ma's chances, Yeh said he had no idea who they preferred. Yeh denied rumours that the mainland had subsidised the businesspeople's return in an attempt to strengthen Ma's re-election chances. Beijing has reportedly backed Ma for a second term in a bid to maintain warming cross-strait relations. However, some mainland-based businesspeople said that although Ma's engagement policy with the mainland has benefited the island economically, not all of them support him. "I would say that between 30 and 40 per cent of them support the DPP," said a businessman based in Chongqing who declined to be identified. Ma's campaign has used the principle of the "1992 consensus", a tacit agreement reached by the two sides during talks in Hong Kong that year, to maintain relations. Under the consensus, both sides recognise there is only one China, but each can have its interpretation of what that China stands for. Tsai, however, disagrees that such a consensus was reached, despite warnings by Beijing that recognition of the consensus is necessary for the mainland to continue exchanges and talks with Taiwan. Airlines said all Taiwan-bound flights from the mainland and Hong Kong were fully booked, despite the addition of more than 100 charter flights. The peak travel days for people flying to Taiwan should be today and tomorrow, they said. Taiwanese and mainland airlines are operating 370 cross-strait flights a day, and there are 50 flights a day to and from Hong Kong.

Hong Kong Post to issue special stamps for Year of Dragon - Nelvin Lee, designer of a set of special stamps for the Year of Dragon, introduces his works during a media conference in Hong Kong, south China, Jan. 12, 2012. Hong Kong Post will issue special stamps for the Year of Dragon on Jan. 14, 2012. It has issued special stamps to mark traditional Chinese Lunar New Year since 1967.

Eames Demetrios - At first glance, Eames Demetrios seems to live in the past. The grandson of Charles and Ray Eames, arguably the 20th century’s most famous furniture designers, is the principal of the Eames Office, which sells merchandise related to the family’s namesake line of chairs and promotes their legacy. He is also the creator of “Kymaerica” and “Kcymaerxthaere,” two art projects that seek to show an alternative history of the world via activities such as placing bronze markers in public places across the globe, and storytelling sessions that expand and explain his fictional universe. These days, however, the 49-year-old movie buff — he claims to have watched more than 500 films during his senior year in high school — is spending more time in the developing world. His recent travels have taken him to India and China to promote Eames-furniture maker Herman Miller, as well as his alternative-history interests. Mr. Demetrios (his parents named him Eames to keep the name in the family) spoke to The Wall Street Journal from Los Angeles and San Francisco about why designers shouldn’t worry about style, taking the ferry in Hong Kong and his favorite Namibian hotel. I travel a great deal. I’ve given lectures and talks in 37 countries, and I really enjoyed being in Hong Kong. I’m not the first person to say that taking the Star Ferry [across the Victoria harbor] at night gives you the best tourism value in the world. 

 China*:  Jan 14 2012 Share

China has the world's largest fishing fleet, with more than 1 million vessels, according to the Ministry of Agriculture. This port, Shidao, is the largest fishing port in north China.Photos by Cui Meng / China Daily. Wang Xinqing kept count as bins of Yellow Sea fish were heaved from two of his boats onto trucks waiting at Shidao port, Shandong province. He figured the catch would produce little profit, but he expected that. "I ordered the boats to come back when the storage was only half full," Wang said. "That way at least we wouldn't lose the catch. "If the boats stayed in South Korean fishing grounds longer and caught the eye of South Korea coastguards, they almost certainly would find some reasons to fine us, even though we have a fishing permit and did everything according to regulations." Not everyone does things by the book. "If we don't cheat, we can't earn a living," one fisherman said. But it's a risky business. Fish stocks are depleted in Chinese waters and South Korea is getting tougher in protecting its own waters. "The book" was set out in June 2001 under the Sino-South Korea Fishery Agreement. It defined sea areas for fishing and requires boats from one country to obtain a permit to fish in waters under the other's administration. China has similar agreements with Japan, signed in 1997, and Vietnam, in 2000. The 2001 agreement was considered provisional at the beginning, but the territories did not change when China and South Korea established exclusive economic zones in 2005. Under international maritime law, a state has special rights over the exploration and use of marine resources in such a sea zone. The Chinese have worked resource-rich fishing grounds off South Korea for more than a thousand years, said Li Yongkai, deputy director of oceanic administration of Rongcheng city, which administers Shidao, the largest fishing port in northern China. Because of the agreement, Li said, a great number of Chinese fishing vessels had to retreat from that area. Fishermen complain they cannot survive by fishing just in China's territory, where marine resources have declined dramatically. Bohai Sea, where Shidao port sits, used to have 70 types of marine products with commercial value, according to a study released in July by Tianjin Bohai Sea Marine Products Institute. Pollution and overfishing have cut that number to 10. "China's overfished and depleted waters are forcing Chinese fisherman farther and farther out into sea, where they are running into more and more trouble with Korean coast guards." Li said. 'Don't have a choice' In the first year of the fisheries agreement, 2,796 Chinese and 1,402 South Korean fishing boats were granted permits, according to China's Ministry of Agriculture. For this year, South Korea has issued about 1,900 permits to Chinese boats. Only 217 go to Rongcheng this year, 89 fewer than last year. More than 2,300 fishing boats are registered there. South Korea's government has repeated pledges to crack down on illegal Chinese fishing boats in the exclusive economic zone. Some fishermen try their luck without permits. "To avoid bumping into South Korean coast guards, those fishermen have to go out in harsh weather, with strong wind and huge waves," Li said. "Coast guards won't risk their lives to patrol, but to survive, our fishermen will." South Korea caught 10 boats from Rongcheng that were fishing without permits last year, compared with 30 the year before. Tang Fuyang, owner of Lurongyu 1492, was one who pushed his luck too far. He was fined 410,000 yuan ($64,900) on Nov 3. "My whole year's earning went down the drain because of the fine, and I couldn't even afford to pay my crew," Tang said. "But trust me, I really don't have a choice."

Shanghai growth may be lowest in almost 20 years - Shanghai's economic growth slowed to around 8 per cent last year, the municipality's mayor said yesterday, down from double-digit growth in 2010 and potentially the lowest figure in almost 20 years. Delivering his annual report at the opening of the Shanghai people's congress, Han Zheng described the slower growth as "stable and healthy", and said the drop was partly due to less activity in the property sector. Inflation in the city ran at 5.2 per cent last year, up from 3.1 per cent the year before, but the mayor said this was "slower than the national rate", without revealing the national figure, which is due to be released next week. Although Han did not give a specific figure for economic growth - saying merely that it was estimated to be "above 8 per cent" - if it falls from the 8.3 per cent estimate for the first three quarters of the year, it could be the lowest in 19 years. Shanghai's economic output grew by 10.3 per cent in 2010, according to the city's statistics bureau. It has enjoyed double-digit growth almost every year since 1992, aside from 2008 (9.7 per cent) and 2009 (8.2 per cent) when it was feeling the impact of the global financial crisis. Han promised that he would "deepen reform" of the city's residence permit system to make it easier for qualified migrants to switch to a local hukou under a points scheme introduced last year. He also said the city would take steps to support foreign entrepreneurs as part of its efforts to boost the city's attractiveness to "high-level overseas talent", but did not give details. Han hailed the fall in property prices as evidence of the city's "resolute implementation of the national policy of regulating the property market", and showed it had "completed the objective of controlling the price of new homes throughout the whole year". He said the city would start construction of 11 million square metres of public housing this year, adding to 17 million square metres started last year. Han also pledged to accelerate construction of the city's Disneyland theme park, but did not provide details. Work started on the long-awaited 390-hectare park and resort in April last year, and the 29 billion yuan (HK$35.67 billion) project is expected to be completed in 2016. Mark Williams, chief China economist for Capital Economics, said he did not see the slowing of the city's economic growth as a cause for concern. "Eight per cent growth is still pretty good."

China’s Li Na fought back from a set and a break down to delay Petra Kvitova’s bid for the world number one ranking in a tenacious semi-final victory at the Sydney International on Thursday. French Open champion Li recovered to down Wimbledon winner Kvitova 1-6, 7-5, 6-2 in two hours of high-class tennis to reach her second consecutive Sydney final. In doing so, world number five Li frustrated the Czech left-hander’s immediate hopes of toppling Caroline Wozniacki from the top of the women’s rankings ahead of next week’s Australian Open in Melbourne. Kvitova, trailing Wozniacki by just 295 rankings points, would have claimed the number one ranking if she had won the Sydney tournament, with 470 points up for grabs to the winner. Li will face either Belarussian third seed Victoria Azarenka or Polish seventh seed Agnieszka Radwanska in Friday’s final. “The way she was playing in the first set I didn’t know what to do. Give up? I couldn’t do anything,” Li said. Defeat for the Chinese star looked certain after Kvitova stormed through the opening set losing just one game and broke early in the second set to lead 3-1, but Li took a grip on the match with fearless serving and shot-making. “I think in the second set the match turned around because her service game was not like the first set where she was hitting winners all the time. Several times Li saved break points with a brave deep second serve to stay in the match. But as Li continued to frustrate Kvitova’s attempts to finish off the match she gradually clawed back to finish the stronger. Li now leads Kvitova 2-1 in their matches. “After first set I called my coach to the court and he told me that if I continued to play like I was I would lose the match easy,” Li said. “Like maybe after 50 minutes we can go to the airport. “He said I had to believe in myself and do better. So I just tried to play more deeper and try to play more of my best tennis.” Kvitova recognised that she was not clinical enough, and after dominating the opening set she gave Li chances to get back into the contest. “I played very well the first set. I was the one who made the winners... And then in the second set, I gave her a lot of chances and she did it.” “It’s tennis, so it’s still up and down,” said the world number two. It was rejuvenated Li’s fourth win this week, continuing her upsurge in form after a dismal follow-up to her landmark French Open success, which saw her become the first Asian to win a grand slam title. Li, who only won seven matches in the second half of last year, said she was back in the form she had enjoyed prior to Wimbledon, where she bowed out to Germany’s Sabine Lisicki in the second round. “Yeah, I’m back,” she said. “I think I am feeling stronger and not only in the body, but also in the mind. “I believe in myself so I can do better.” Li at 29 is the oldest player in the women’s top 10. After winning last year’s Sydney International she went on to reach the Australian Open final, where she lost out to Kim Clijsters in three sets.

Google Inc., which pulled its Web-search engine out of mainland China two years ago after a confrontation with Chinese authorities over censorship, has renewed its push to expand there, in an acknowledgment that it can't afford to miss out on the world's biggest Internet market. The search giant is hiring more engineers, salespeople and product managers in China and working to introduce new services for Chinese consumers, according to Daniel Alegre, Google's top executive in Asia. In particular, Google is aiming to capitalize on its fast-growing Android operating system for mobile devices, online-advertising and product-search services to grow in China, Mr. Alegre said in an interview. One goal, he said, is to introduce its Android Market, which offers thousands of mobile applications to users of Android-powered smartphones and tablets but isn't available in China. The company also is trying to win over Chinese consumers with services that don't require official censorship, such as Shihui, which launched in September to help people search among Chinese sites offering discounts at local stores. Google is also working to beef up its product-search service to help consumers find goods from online retailers. Chinese officials didn't respond to a request for comment. Google is revving up its new push near the two-year anniversary of its declaration that it would stop censoring its Internet-search results in China, as required by local law, and that it was prepared to leave the country altogether. The Jan. 12, 2010, announcement represented a stark departure from the policy of compromising with Chinese authorities that Google and other Western technology companies had long followed. And it was perceived by many Chinese as marking Google's total withdrawal from the country. The censorship fracas began after Google disclosed it had traced a 2009 cyberattack back to Chinese hackers, who allegedly stole some of the company's proprietary computer code and attempted to spy on Chinese activists' Gmail accounts. Chinese officials denied any connection to the incident. Google subsequently stopped offering Web search on its main Chinese site,, and instead directed people to a search site based in Hong Kong, which isn't subject to the same government censorship requirements. But for users in mainland China, the Hong Kong search site, along with other Google services such as Gmail, are plagued with frequent service disruptions because of the government's Web-filtering system. 

Measuring at about 60 centimeters long, an arowana is priced at 88,000 yuan ($13,924) at a market in Nanming district of Guiyang city, Southwest China’s Guizhou province on Jan 10, 2012. This kind of fish is popular with customers despite the high prices, since the fish’s Chinese name is translated literally as ‘dragon fish’, which associates the fish with fortune and auspicious omens.

Cross-border yuan settlements by the Bank of China Ltd have exceeded $100 billion. Officials say trade ties, a stable exchange rate and real overseas demand for the currency are buoying the cross-border yuan business. China will increase cross-border circulation channels for the yuan and encourage commercial lenders to provide "packaged" financial services for companies going abroad, to accelerate the yuan's float globally, said a senior central bank official on Wednesday. "These are the major tasks we aim for in the next phase to promote the yuan's internationalization," said Li Dongrong, assistant governor of the People's Bank of China (PBOC), in a statement on the bank's website. He said that close international trade ties, the stable yuan exchange rate and real demand of overseas residents for the Chinese currency had established a solid foundation for the development of cross-border yuan business. "Meanwhile, because of the global financial crisis and the constantly expanding sovereign debt problem, weaknesses and systemic risks in the current international monetary system loomed large, which provided opportunities for the yuan to float worldwide," Li said. The government said in August that it would expand cross-border trade settlements from 20 provincial regions to the entire country. It also promised a 20 billion yuan QFII quota for Hong Kong companies to invest in mainland securities. In October, China allowed foreign investors to make direct investments with the yuan legally obtained overseas. Yuan-denominated trade settlements surged from $2.7 billion in the first quarter of 2010 to $90.9 billion in the third quarter of 2011. The share of China's trade invoiced in the yuan rose from 0.39 percent to 9.33 percent during the same period. As of the end of 2011, trade settlements in the yuan had reached a cumulative 2.58 trillion yuan ($408.57 billion), and foreign direct investment conducted in the currency had exceeded 90 billion yuan, the PBOC said. It also said that overseas direct investment from China settled in the yuan had reached 20 billion yuan. The central bank had signed currency-swap agreements worth 1.3 trillion yuan with 14 countries and regions by the end of 2011, including South Korea, Malaysia, Hong Kong, Belarus and Argentina, to expand the use of the yuan. In December, Japan said that it would become the first developed economy to hold yuan-denominated bonds as reserve assets. It also said it would cooperate with China to promote the yuan's role in trade and financial transactions. "Further progress in the yuan's internationalization implies that there is a potential crowding-out effect on the US dollar, but such an effect is more likely to emerge for trade-related transactions rather than financial activity, at least in the short term," said Zhang Zhiwei, Nomura Holdings Inc's chief economist for China. Although China, the world's second-largest economy, aims to make the yuan a global currency, insufficient convertibility under the capital account means the yuan could only fulfill 10 percent of its potential international role, said Ma Jun, chief economist at Deutsche Bank Greater China. "That's the real bottleneck for the next phase ... If China opens its capital account, overseas deposits in the yuan could go up to 30 trillion yuan within five years, in contrast to 2.4 trillion yuan if it doesn't allow full convertibility of the currency," he said. Ma said that he expected China to further loosen the quota limit for foreign capital to invest in the domestic capital market.

Yao Ming and his wife, Ye Li, visit the Chengdu Research Base of Giant Panda Breeding on Wednesday to mark the launch of its program for a large-scale release of captive pandas into the wild. Yao Ming was relaxed while visiting the nursery in the Chengdu Research Base of Giant Panda Breeding in this capital of Sichuan province, on Wednesday afternoon. Holding one small panda after another, he kept smiling and saying: "They are so cute." The former NBA star visited the Chengdu base after participating in the opening ceremony for Panda Valley in Dujiangyan, a city under the administration of Chengdu, in the morning. The valley, a controlled wilderness designed to train pandas before sending them into the wild, was formally opened to six pandas on Wednesday in Yutang, a town in Dujiangyan. Yutang was where the first wild panda was found after the People's Republic of China was established in 1949. In January 1953, the panda was found in the town and sent to an animal farm at the Chengdu Zoo on Futou Hill in northern Chengdu, the site of the present-day Chengdu Research Base of Giant Panda Breeding. This marked the beginning of panda conservation in China. Covering nearly 134 hectares, the valley, created with a total investment of 300 million yuan ($48 million), can prepare 30 to 40 pandas for life in the wild. Thirty to 40 pandas will follow the first six before the program is gradually extended to all the pandas in the Chengdu base, which plans to increase the number of pandas to 120 to 150 in 10 years, according to Zhang Zhihe, chief of the research base. The first six pandas were relocated on Wednesday morning from Zhang's base to the valley, about 50 km from Chengdu. The two males and four females born between 2007 and 2009 are still immature. They grow rapidly, are bold and have strong ability to adapt to the environment. The Chengdu base has spent nearly a year choosing them from its 108 pandas based on their pedigree, health, genetic background and gender ratio. "They will spend increasingly less time with humans, including their breeders, before their release and will feed on bamboo instead of dietary supplements. They will live in the valley without many buildings and where bamboo is distributed in different parts so that they must move around to look for food and enhance their physical strength," said Huang Xiangming, head of the animal management department of the base. "We have spent five decades saving pandas from extinction and have lived with them peacefully. We will spend another five decades or more time sending them to the wild, rather than keeping them in captivity," Zhang said. In the 1970s and 1980s, 108 pandas perished in China as a result of the blossoming of bamboo, which affects the bamboo leaves that the pandas depend on. Zhang's base was set up in 1987 to house six sick and hungry pandas rescued from the wild. Thanks to the joint efforts of several generations of researchers, the base has solved the main difficulties in panda breeding, and it has 108 captive pandas, boasting the biggest captive panda population in the world, Zhang said. "It was difficult for pandas to be ruttish. It was difficult for them to be pregnant, and it was difficult for their cubs to survive. These were the three difficulties in panda breeding," he said. Coupled with the population growth is the risk of cross-infection of contagious diseases as the pandas are densely populated in his base. In addition, urbanization has an adverse effect on its surrounding environment. To find an alternative, the base decided to build the valley in 2006 with the support of the central government. In May 2010, the groundbreaking ceremony was held and its first phase was completed last month.

Premier Wen looks at the big picture of Sino-US co-op - Chinese Premier Wen Jiabao (right) meets visiting US Treasury Secretary Timothy Geithner in Beijing on Wednesday. China and the United States should enhance economic and trade cooperation rather than politicize economic issues, leading government officials said on Wednesday. "China insists that dialogue is better than confrontation, cooperation is better than containment," Premier Wen Jiabao said as he met US Treasury Secretary Timothy Geithner. "We should take care of the core interests and concerns of each other, and resolve friction appropriately," Wen said. "Both countries should take concrete measures and promote cooperation in trade, investment, infrastructure and high-tech, in a wider, closer, more balanced way." Wen's remarks came against a backdrop of economic and trade friction between China and the US. The Wall Street Journal on Tuesday reported that US President Barack Obama plans to form a government taskforce to monitor China's compliance with US trade rules. Confirmation is expected later this month, it said. Late last month wind turbine manufacturers in the US filed a complaint with the US Department of Commerce and the International Trade Commission claiming that China and Vietnam were dumping products at below-cost prices and receiving government subsidies. It follows a probe into solar panel manufacturers in China by a group of US companies last October. "This year is of decisive importance for both China and the US maintaining stable development for China-US relations is very important," Vice-President Xi Jinping said during his meeting with Geithner on Wednesday. "China is willing to expand economic and financial cooperation with the US, resolving friction through consultation rather than politicizing economic issues. This will help maintain sustainability of the two economies and allow the world economy to recover sooner." Geithner said the US agreed with China on developing "closer" economic and trade cooperation, promoting economic growth for the two economies and maintaining global financial stability. But experts doubt whether the US would actually transfer words into action. "This is a very tough year for the global economy. As the world's leading economies, China and the US should be cautious and responsible," said Zhang Yansheng, professor at the Institute for International Economic Research of the National Development and Reform Commission. November will see a US presidential election and before that there will be polls in Greece and France. "Unfortunately, what the US has done in the past few months is not reasonable, ranging from the solar panel probe to currency pressures and the Trans-Pacific Partnership Agreement," Zhang said. The agreement is a trade pact being negotiated by the US with some countries in the region. The US Treasury Department said in its twice-yearly report last month on global currencies that the yuan is substantially undervalued and the US will "press for policy changes that yield greater exchange-rate flexibility". The US has been pressurizing the government to appreciate the yuan. In actual fact, the yuan has appreciated by about 8 percent since China allowed greater fluctuation in June 2010.

Geithner gets cold shoulder on Iran - State media coverage of Chinese leaders' talks with visiting US Treasury Secretary Timothy Geithner yesterday conspicuously failed to mention any discussion of Iran's nuclear ambitions, despite pressure from the United States for China to back financial sanctions on Tehran. This probably means that while the leaders listened to the Americans' arguments, China is unlikely to go along with the US-led sanctions any time soon. Despite its reluctance to endorse the US campaign against Iran, China feted Geithner, visiting as special representative of US President Barack Obama, ahead of the expected visit of Vice-President Xi Jinping to the US next month. Geithner met Xi, Premier Wen Jiabao and Vice-Premier Li Keqiang. One of the top items on Geithner's agenda was to get Beijing's support for tougher US sanctions on foreign banks that have business with the central bank of Iran. The US accuses Tehran of attempting to develop nuclear weapons. Wen will begin a trip to three Middle Eastern countries on Saturday as tensions over Iran raise concerns that China's oil imports may be affected. Washington was "in the early stages of a broad global diplomatic effort to take advantage of this new legislation to significantly intensify the pressure on Iran", Agence France-Presse quoted a senior US official as saying in Beijing yesterday. "We are telling them [the Chinese] what's important to us and they are listening." But remarks by Xi, Wen and Li reported by state media focused on Sino-US ties, without mentioning Iran. The foreign ministry said China's energy co-operation with Iran did not violate UN Security Council resolutions. "To place one country's domestic law above international law and press others to obey is not reasonable," ministry spokesman Liu Weimin said. Professor Jia Qingguo from Peking University's school of international studies said: "China attaches importance to Geithner's visit and Chinese leaders seriously listen to his opinion. But that does not mean China needs to impose sanctions on a particular country just because the US does not like it." Zha Xiaogang, a researcher at the Shanghai Institute for International Studies, said Beijing would not bow to US pressure, and China needed to consider its investment interests in Iran. In his meeting with Geithner, Wen called on both countries to thoroughly consider each other's core interests to enhance mutual trust and properly settle differences. Xi said both countries should implement the consensus regarding bilateral ties reached between Obama and his Chinese counterpart Hu Jintao, and called for more mutual respect. "Both sides should settle disputes through consultations on an equal basis rather than politicising economic issues," Xi told Xinhua. Li made similar calls, saying better co-operation boosted development. Geithner also emphasised Sino-US strategic relations when meeting Xi. "On economic growth, on financial stability around the world, on non-proliferation, we have what we view as a very strong co-operative relationship," he said.

Hong Kong*:  Jan 13 2012 Share

The Tourism Board has forecast the city will see 44.2 million visitors this year, 5.5 per cent more than last year. The board said on Wednesday that the mainland was again expected to be the main driver of growth, with cross-border numbers rising 7.6 per cent to 30.2 million. Long haul arrivals from outside Asia were expected to drop 1.9 per cent to 4.7 million. The projected growth is much smaller than that for last year, when Hong Kong welcomed 41.9 million visitors, up 16.4 per cent from a year earlier. Mainland arrivals were up almost 24 per cent while the long-haul trade contributed 1.7 per cent growth. Single-digit growth this year would be in line with earlier Tourism Board predictions.

China’s top economic planner the National Development and Reform Commission said on Wednesday that it has given approval for 10 domestic banks to issue bonds in Hong Kong worth a combined 25 billion yuan (US$3.96 billion). The approvals come as Beijing takes fresh steps to boost the development of its nearly two-year-old but slowing yuan trade settlement scheme in Hong Kong, including opening up a fresh channel for yuan to flow back into the mainland. A sell-off in the offshore yuan market in late September and melting expectations of heavy yuan gains has taken a toll on issuances of yuan-denominated “dim sum” bonds in the Hong Kong market in recent months. About 23 billion yuan in dim sum debt was issued in the last three months of last year compared with more than 50 billion yuan in the June quarter according to Thomson Reuters data. To boost bond issuance activity in the CNH market, the authorities have given approvals to mainland companies to issue bonds in Hong Kong including large financial firms. China Development Bank Corporation will issue renminbi bonds in Hong Kong for the first time using an electronic facility indicating growing acceptance among offshore investors. The banks consist of China’s five biggest state-owned banks, three policy banks and two China incorporated lenders of foreign banks, the NDRC said in a statement.

China imported nearly a fifth more gold from Hong Kong in November than the previous month, continuing a trend of sharply rising purchases that has seen bullion flows to the mainland more than treble in the first 11 months of the year. A record 102.525 tonnes of gold entered the mainland from Hong Kong in November, pushing the total gold flow in the first 11 months of the year to 389.295 tonnes, said the Hong Kong Census and Statistics Department. “It’s a very strong number,” said Nick Trevethan, Senior Commodity Strategist at ANZ in Singapore. “It confirms our view that China is buying significant quantities of gold, that Chinese retail and other investors are keen to include gold in portfolios.” December shipments were probably also strong as importers stocked up before the Lunar New Year, which falls on January 23 this year, but the appetite may ease in January and February, he added. Explosive demand growth from China in recent years helped propel gold to a record high above US$1,920 an ounce in September. Prices have since slipped back, with spot gold at US$1,635 on Wednesday, about 15 per cent below the all-time high.

Law Ying-kuk shows new HK$20 and HK$100 banknotes he collected from a branch of HSBC in Kwun Tong on Wednesday. Hundreds of people, mainly elderly, queued up outside banks as redesigned HK$20 banknotes went into circulation on Wednesday. Many of them said they would use the notes for lai see packets during the approaching Lunar New Year. The new notes from all three note-issuing banks have improved security features. Their patterns feature local festivals, Chinese heritage and the city’s scenic spots. HSBC’s new HK$100 notes also went into circulation on Wednesday, after a flaw was found in the design in July. “It’s tradition to have new notes for lai see packets. The design doesn’t matter, but it’s important the notes are new,” said Law Ying-kuk, 71, who arrived at the HSBC branch in Yue Man Square, Kwun Tong, at 8.30am. The queue outside the branch began to form as early as 7am. The bank opened an hour earlier than usual, at 8am, but by 9am about 200 people were queuing. Some people waited for up to an hour and a half to receive their notes. Law took out HK$7,000 to fill lai see envelopes, of which HK$2,000 was in the new banknotes. At Standard Chartered banks, customers were required to have cash ready to exchange for new notes. The notes distributed on Wednesday are the last batch of new banknotes released after the most recent redesign that began last November when the new HK$50 notes of all three note-issuing banks and HK$100 notes of Standard Chartered and Bank of China went into circulation. The redesigned HK$1,000 and HK$500 notes of all three banks have also gone into circulation since. In July, the design of the new HSBC HK$100 banknotes was found to be flawed. The five petals of the White Bauhinia flower on the Hong Kong flag pointed in the wrong direction, and the notes were redesigned and reprinted.

One of the new caster decks at FedEx Express' expanded facility at Chek Lap Kok. FedEx Express has expanded its airport facility in Hong Kong by more than a third to improve its parcel-handling efficiency, ignoring the downturn in the air cargo industry. The company installed new equipment and storage space, which would allow it to handle 200 tonnes of cargo in just under 45 minutes, compared with two to three hours in the past, said Anthony Leung, managing director of FedEx Hong Kong and Macau, yesterday. The ground handling facility of FedEx at the Asia Airfreight Terminal in Chek Lap Kok has been expanded 37 per cent to 4,695 square metres. Alongside the hardware upgrade, FedEx has also increased its Hong Kong staffing levels by 5 per cent. The expansion in facilities comes as cargo volumes are dwindling. Hong Kong International Airport saw its cargo tonnage drop 4.6 per cent year on year in the first 11 months of last year. The uncertainty in the global economy prompted Cathay Pacific Airways (SEHK: 0293) to defer the delivery of two Boeing 747-8 freighters to next year. Leung said the express cargo business would be less adversely affected by the European debt crisis than general air cargo. This is because importers tend to place ad hoc orders in small quantities rather than in bulk when they need to test customer response on products before placing big orders for them. This trend had become more widespread of late, especially for electronic goods and garments, said Leung. "I don't have the crystal ball to tell whether there will be an uptick in the cargo demand at some point in 2012. But if it happens, just as it did in 2009, we will be ready for it because of the ramp-up." The number of trucking docks have been doubled to 14 and those with direct ramp access also doubled, to four. An additional 748 square metres of caster decks have been added to facilitate faster movement of freight shipments. The company has not revealed how much it spent on the expansion. Leung said it would soon make its regular adjustment to service charges, but the percentage of the rate increase had yet to be finalised. FedEx replaced old aircraft with Boeing 777 freighters in 2010 to give Hong Kong shippers a faster, non-stop service that gave them later deadlines to get cargo to the airport.

Only about 145,000 mainland-born children of Hong Kong parents will end up reuniting with them in the city, a calculation based on recent data and government estimates suggests. That is less than 9 per cent of the 1.67 million the government predicted 13 years ago would flock to Hong Kong. Jackie Hung Ling-yu, a project officer of the Catholic diocese of Hong Kong's Justice and Peace Commission who has been helping abode claimants for more than 10 years, said yesterday at a Legislative Council subcommittee meeting the government owed the claimants an apology. "How did you get the 1.67 million figure?" she asked. "That was done in 1999, but we still cannot get an answer today ... the government and some political parties still use similar tactics today to deceive the public in the migrant workers' right of abode saga." The 1.67 million estimate was made by former secretary for security Regina Ip Lau Suk-yee - now a lawmaker - in 1999 after a controversial Court of Final Appeal ruling that awarded right of abode to children born out of wedlock to a Hongkonger and children born before either parent became a permanent resident. However, figures in a Legco paper yesterday showed that from 2000 to September 2010, only 64,842 such children had come to Hong Kong on a one-way permit and an estimated 80,000 grown-up mainland children would settle in the city after a new policy announced last year. In fact, Immigration Department figures show that the total number of mainland one-way permit holders who settled in Hong Kong was only 514,362, less than half the estimate made in 1999. Lawmaker Cyd Ho Sau-lan said: "The government was lying to Hong Kong people at that time and stirred up much fear and exclusionist sentiment. And we only find out it was such a big error now. It is ridiculous." Maggie Wong Siu-chu, principal assistant secretary for security, did not answer the criticism directly, only saying the current figure could not be compared with the 1999 estimate. Ip saw no need to apologise. "It was a bona fide attempt," she said. "Officials were acting in good faith. It was our best effort available at that time." She said the Census and Statistics Department arrived at the 1.67 million figure through scientific means and no one would have expected the mainland economy to grow so fast in the intervening years that mainlanders now did not want to settle in Hong Kong. Under the new policy announced last year, children of Hongkongers born on the mainland who were under 14 when their natural father or mother obtained a Hong Kong identity card before November 1, 2001, are eligible to apply for right of abode. Applications opened in April. So far, the mainland authorities have received 28,286 applications and granted one-way permits to 5,335. Some single mainland mothers who need to travel frequently to Hong Kong to look after their children have complained they are not qualified to get one-way permits.

Hong Kong Disneyland, which has reported record attendance figures, said yesterday it was planning to double visitor numbers within a decade by turning Lantau into a major tourist destination. Developing tourism to Lantau, the biggest island in Hong Kong, was a key component of Disneyland's strategy to attract 11 million visitors a year by 2022, almost double the record 5.9 million it attracted in 2011, said Andrew Kam Min-ho, managing director of theme park, which last year narrowed its net loss from HK$718 million to HK$237 million. Kam said Disneyland would hand the city's new government, which takes office in July, a development plan drafted in consultation with an alliance including major Lantau stakeholders among them the island's district council, exhibition companies, hotels and ferry operators. The government owns 57 per cent of the park. AsiaWorld-Expo is understood to have joined the grouping, to be named the Lantau Economic Development Alliance. The alliance will also approach the Airport Authority, which runs the airport on Lantau's northern shore. A spokesman for the Lantau cable car said it had not joined the grouping, However, Li Yan-tai, formerly in charge of the attraction, is the alliance's honorary secretary. The Lantau plan was announced as the park declared record attendance and hotel occupancy over the previous financial year, one of the six-year-old attraction's best yet. Some 5.9 million people visited the park in the year to October, 13 per cent more than in the previous year. Although it has yet to break even, record revenues of HK$3.6 billion helped Disneyland report a surplus before deducting interest, taxes, depreciation and amortisation (ebitda) for the second time in a row, up to HK$506 million from HK$221 million. The alliance would play an important role in continuing this trend, Kam said. "In the coming few years, the Hong Kong-Zhuhai-Macau bridge will be finished. With the third runway being planned at Hong Kong International Airport and the express rail link [from Guangdong] reaching Hong Kong in 2016, the city's tourism will receive another boost," he said. Expansion within Disneyland would boost visitor numbers - since Toy Story Land opened in November, the park had seen a double-digit growth in visitors, he said. Grizzly Gulch, which will feature a roller-coaster, and the Mystic Point attraction, will open this summer and in spring 2013 respectively. Developing the new attractions cost HK$3.63 billion. They are expected to draw more than 1.5 million visitors per year. Further details of expansion plans may be announced later this year, Kam said. Asked when he expected Disneyland to break even, Kam remained positive but refused to set a date, saying only: "With such a strong performance as a base and with expansion as a pipeline, we are confident that we can achieve that goal." Lawmaker Fred Li Wah-ming said he expected the park to break even this year. "It is going on the right track ... however, expansion shouldn't stop. The park should release its plans [for Lantau] as soon as possible," he said.

Ocean Park chairman Allan Zeman, in costume, centre, celebrates the park's 35th anniversary along with Chief Secretary Stephen Lam Sui-lung. Zeman used the occasion to unveil details of a new attraction. Ocean Park visitors will have the chance, starting in early March, to travel back in time to a Hong Kong street typical of the 1950s to 1970s. The new attraction, "Old Hong Kong", was announced at the park's 35th anniversary celebration, and will feature old tenement buildings or tong lau, vintage trams, an old clock tower, a rickshaw and a colonial police post from which police directed traffic. Food will also be sold at a dai pai dong, with visitors walking through the 35,500 square metre attraction after leaving the cable car station. The clock chimes visitors will hear every 15 minutes may sound familiar, as they will mimic those from the former Star Ferry clock tower in Central. Alex Chu Foun, Ocean Park's executive director in design and planning, said the American company that created the mechanical parts for the Star Ferry tower had also supplied the park's clock tower. Said Chu: "We are not replicating any old Hong Kong landmarks, but creating a brand new street that would be commonly found in 1950s to 1970s Hong Kong." Kee Wah Bakery will open a shop inside the attraction for visitors to buy local Hong Kong delicacies. Allan Zeman, the park's chairman, said the idea for the street was conceived two years ago. "Hong Kong has gone through so many changes and has torn down so many beautiful old buildings ... we thought it was important that young people and tourists should experience the old Hong Kong," he said. "It's a great fallback for young people who never had a chance to experience [the 1950s to 1970s]. "I think most Hongkongers will be able to come here with their parents and remember the old days." The park will feature up to eight stores with game booths inside, each with a different theme. In one store, mocked up to look like a basket shop, visitors will be able to throw balls into a hoop. In another, decorated like a barber's shop, they will be invited to pull on strings that look like electric wires for perming hair for the chance to collect prizes. The old tram car in the middle of the attraction may also look familiar to some older Hongkongers. The park commissioned Hong Kong Tramways to recreate a tram car from the era and it took a year to make. It will, however, be stationary. "Some parks have Main Street, while Ocean Park has Hong Kong Street," Zeman said, in an reference to Disneyland's Main Street. He added that Ocean Park's Hong Kong street was a new concept and was not in any way similar to the Disney attraction. He said that for now there was no intention of raising ticket prices, adding that the park was in the final stages before beginning the tender process for developers to build two hotels, slated to open in 2014.

A string of senior figures in Hong Kong's legal system have defended the impartiality and independence of the judiciary against public and political interference, after a year of controversial cases. Speaking yesterday at a ceremony marking the new legal year, Secretary for Justice Wong Yan-lung urged the public not to put pressure on courts deciding cases of great social importance so as to uphold judicial independence. At the same ceremony, the chairman of the Bar Association, Kumar Ramanathan, also urged people not to attack lawyers who represented unpopular clients, saying it was their duty to ensure people have access to justice. The increasing number of judicial reviews showed that people were aware of their freedom and right to challenge a governmental policy, said Geoffrey Ma Tao-li, chief justice of the Court of Final Appeal. He said that the courts would only consider the arguments of the case and would not be swayed by political issues. Their comments came against the background of a number of controversial judicial reviews last year, including the construction of the Hong Kong-Zhuhai-Macau Bridge, and foreign domestic helpers' fight for right of abode. "Judicial decisions must be independent and impartial and must not be dictated by public opinion or convenience," Wong said. "We could help strengthen judicial independence by carefully preserving an environment where judges may decide cases strictly in accordance with the evidence and the law, free from any extraneous considerations as well as improper influences or pressure, direct or indirect, even though the judgment may result in serious consequences for the community as a whole." On the issue of clients, Ramanathan said it was a traditional rule that a barrister must take a case even if he disapproved of the client's character, unless there was a conflict of interest. He said: "In the course of this year, some members of the Bar have been criticised for representing parties, or seeking relief from the courts in respect of causes or issues that were considered as unpopular by some sections of the community. These attacks, some of which were rather brutal and personal, were unjustified, unwarranted and in ignorance of the duty, obligation and traditions of a barrister. "I hope the public will learn to understand and appreciate that when a barrister accepts a brief to argue an issue which, or represent a party who, is perceived to be unpopular or distasteful, the barrister is only carrying out his duty in accordance with his obligations." Ramanathan did not refer to a particular case. But one controversial case that led to criticism was the fight for the right of abode for foreign domestic helpers. The Civic Party's Gladys Li, who was acting on legal aid, was criticised for representing maids.

Anger towards Dolce & Gabbana intensified yesterday when a woman claiming to work for the Italian luxury fashion house posted remarks online describing protesters drawn to the flagship outlet at the weekend as shameful and mentally retarded. Internet users retaliated by digging up and publicising details of Charlian Cheung Hiu-ching, 25, who later closed her Facebook page and blog. Cheung, who said she worked for the Harbour City store in Tsim Sha Tsui, complained about the hundreds of people who gathered at the shop on Sunday to protest against what they said was a ban on local people taking photos of the shop. One demonstrator stuck "hell money" - paper cash meant for the dead - on the shop window to form the Chinese characters for "shameful". Their actions forced the retailer to shut for the day. "Because of the shameful behaviour of a bunch of ignorant people, we staff who are merely working for a living had to pick up hell money early in the morning," Cheung posted on her Facebook page yesterday. In an earlier apparent address to her colleagues, she said: "As part of Canton Road DG [Dolce & Gabbana], I greatly regret being unable to work today [Sunday]. You guys should work hard to confront the mentally retarded people; I will support you in spirit." Screen grabs of her Facebook page containing the remarks were re-posted on, attracting more than 2,000 replies. One user wrote: "You give up your dignity as a Hongkonger for the sake of DG [Dolce & Gabbana] wages." Another user wrote: "All I can say is she is really stupid, sigh." Some people pledged to jam the shop's telephone line by calling one after another to complain about her. It is not known whether Cheung actually works at the store. Last week reports emerged of security guards apparently telling locals they could not take pictures of the shop, although mainlanders and foreigners were free to do so. News photographers who later tried to take pictures were stopped by security from the mall and the store. The local office of the fashion house had no comment yesterday, but on Sunday it denied any staff had made "controversial statements" reported in the press. A person close to Harbour City said an internal investigation had been conducted. She said the security guards turned up only upon request from the fashion store's staff who wanted to drive away pedestrians who were taking photographs. She said it could not be verified what the guards had said. But the mall had learned a lesson from an earlier controversy at Times Square. Harbour City and Times Square are owned by The Wharf (Holdings) (SEHK: 0004). In 2008, Times Square and The Wharf were involved in a legal row with the government after charging up to HK$124,000 a day for space designated for public use in the mall's piazza.

Shares of Esprit Holdings (SEHK: 0330) rose more than 11 per cent to their highest in five weeks after the Europe focused fashion group announced a new appointment, boosting hopes that the company was on track for a turnaround. The stock rose to as high as HK$11.56 on Tuesday morning, its highest since December 5. The shares steadied at HK$11.20 by 10.49am, still up 7.7 per cent from the previous close, outperforming a 0.39 per cent gain in the broader market. “The appointment is a piece of positive news that investors needed to support their buying interest, especially as the stock has underperformed for quite sometime,” said Alex Wong, a director at Ample Finance Group. “Though the new appointment will not turn around the company overnight, it does boost hope of a turnaround story,” Wong added. Esprit, which lost 73 per cent of its value last year, was up 12 per cent so far this year. That was compared with a nearly 20 per cent drop in the benchmark Hang Seng Index last year. The index was up 2.7 per cent so far this year. Esprit, which competes with Swedish clothing retailer Hennes & Mauritz and Spain’s Inditex, has appointed Melody Harris-Jensbach, the former deputy CEO and chief product officer of Puma, as its Chief Product and Design Officer in a bid to ensure brand consistency and product efficiency. It marked the latest change to Esprit’s management in a reshuffle that began in November with the announcement that it had appointed Holly Li, vice-president and general manager for northern China of Adidas, as the new chief executive of its China operations. Esprit had said in December that chief financial officer Chew Fook Aun had decided to resign on or before June 1 because he was unable to meet company requirements to make frequent trips to Europe, its dominant market. Esprit, which depends on Europe for about 80 per cent of its sales, is withdrawing from some underperforming markets and spending millions of dollars to revive its brand.

The campaign to preserve Government Hill has drawn support from its architect and influential figures such as former chief secretary David Akers-Jones. Michael Wright, who is now 99 years old and lives in London, recalled the challenges faced in constructing the former government headquarters' west wing in 1959. In a taped interview shown at an exhibition at the University of Hong Kong yesterday, Wright said a lot of thought and care was taken in choosing materials to build the complex's main, east and west wings. It was "terrific trouble" looking at different quarries, including Morrison Hill, for granite that had not been stained by the weather. The team settled on the Diamond Hill quarry, which provided rocks of the best quality. He also recalled how the late architect John Aitken, his colleague, was overwhelmed by the project: "I remember John in tears when it was close to the finish ... It was probably frustration. It is not a masterpiece but a very good example of 1950s contemporary architecture, of good, solid design." The exhibition is the latest effort by the Government Hill Concern Group, which has campaigned for the site's conservation since officials announced a plan in 2009 to demolish the west wing and sell the site for private commercial use. The exhibition features a video, taken by Aitken between 1957 and 1959, showing the construction process and how workers excavated the slopes by hand. "The three wings were designed as a whole for the government to use for a long time ... It would be a great pity to knock down one," Wright said. "It is illogical to trade it off for a pitiful little park, if you excuse my language, with a 30-storey tower. It was a building [designed] to integrate with the landscape." Wright, who was director of public works between 1963 and 1969, also designed the Star Ferry clock tower and oversaw major infrastructure works, including the MTR, the High Island Reservoir and the Cross-Harbour Tunnel. Present at the exhibition were Akers-Jones, who served as chief secretary from 1985 to 1987, and former secretary for health and welfare Elizabeth Wong Chien Chi-lien, who wrote two poems in English for the exhibition. Akers-Jones said: "There will always be a need for grade-A offices. The demand will never cease ... People are regretting they cared about [conservation] too late. We have given Central away. The time has come to stop." He said the west wing should be preserved and used as offices. The government plans to sell the west wing site in 2015. The redevelopment project has yet to go through the Town Planning Board process, and that is on hold because of a court case over the use of the car park in the Cheung Kong (SEHK: 0001) Center, which is within the same zoning plan.

Buoyed by record attendances, hotel occupancy and guest spending, Hong Kong Disneyland has recorded its strongest results since it opened in 2005 – although it has yet to make a profit. The struggling theme park, 53 per cent owned by the government, recorded a net loss of HK$237 million last year. But this was a 67 per cent reduction on the HK$718 million loss of the previous year and its earnings before interest, taxes, depreciation and amortisation more than doubled to HK$506 million. Revenue from attendance rose 13 per cent to HK$5.94 million, average hotel occupancy grew from 82 per cent to 92 per cent at the theme park and guest spending per room rose 10 per cent. “We are pleased with our business performance in the past year,” Managing Director Andrew Kam said on Tuesday. “It puts us on solid ground for future profitability”. The park’s fiscal year ended on October 1 last year. Hong Kong Disneyland’s loss narrowed last year as visitors from mainland China spent more on admission and hotel rooms at the venture between Walt Disney Co. and the city’s government. Net loss shrank to HK$237 million ($31 million) in the 12 months ended Oct. 1, compared with HK$718 million a year earlier, the resort said in a statement distributed in Hong Kong today. The theme park added attractions including Toy Story Land to woo visitors from government-owned Ocean Park and to benefit from an increase in tourists from mainland China. Hong Kong Disneyland, which hasn’t made a profit since operations began in September 2005, may face a challenge in boosting visitor numbers this year as economic growth may slow in China. “We are confident that the number of visitors can keep up with last year’s,” Andrew Kam, managing director of Hong Kong Disneyland, said at a press conference. The park plans to expand and currently has no proposal to raise ticket prices, he said. Hong Kong Disneyland’s revenue rose 20 percent to HK$3.63 billion, according to the statement. Hotel occupancy grew 9 percentage points, it said. Mainland China Arrivals The number of visitors from mainland China, which doesn’t include Hong Kong, accounted for 45 percent of the total. Hong Kong Disneyland said park attendance surged 13 percent to 5.9 million. Hong Kong’s Ocean Park had almost 7 million visitors last year, 65 percent of whom were tourists, according to an e-mailed statement today. “The pie is getting bigger,” Kam said at the press conference. “I am glad that Hong Kong has two theme parks, which carry two distinctively different themes.” Hong Kong Disneyland plans to add 300 full-time and another 300 part-time employees this year, he added. Total visitor arrivals to the former British colony rose 16 percent to 41.92 million in 2011, with the number of tourists from the mainland climbing 24 percent to 28.10 million, according to provisional figures from the Hong Kong Tourism Board. Two out of every three visitors to the city were from mainland China. China’s economic growth may slow to 8.5 percent this year from an estimated 9.2 percent in 2011, according to the median estimate of economists in a Bloomberg News survey.

Shenzhen yesterday unveiled details of its 285 billion yuan (HK$348 billion) plan to create one of the world's biggest logistics centres in Qianhai, and urged Hong Kong to co-operate in meeting the project's challenges. Shenzhen officials have previously outlined their goals and budget for Qianhai - a 15-square-kilometre development zone on the western side of the Pearl River Delta across from Yuen Long - in their city's latest five-year plan. But yesterday's report in state media marked the first time they had released details about how the money would be spent. The billions will be used to fund 311 new projects and 164 existing ones, in the hopes of creating a logistics centre that by 2015 will be one of the best and largest in the world, according to officials who briefed the Southern Metropolis Daily. The city government believes the feasibility study shows a strong growth in demand for logistical services, which by 2015 will have grown by almost a third. Shenzhen has already secured the commitment of several major multinational companies, which it did not name, who have promised to relocate their business to Qianhai once the facilities are up and running. "Qianhai has already made this its primary development target. If we build up the facilities, they will come," said Wang Guowen, the plan's mastermind and a researcher with the Shenzhen-based China Development Institute. Qu Jian, deputy director of the institute, said the project would not undercut Hong Kong's leading position in the logistics industry. "It is a division of labour and we should work together. If Hong Kong and Shenzhen can pool their resources, we can overtake Shanghai as the world's biggest [in port facilities]. Our co-operation would be crucial for us to become the leader in the global logistics business," he said. Apart from tax discounts, Shenzhen also promises to provide special bank loans, simplified administrative measures and other preferential policies to attract international supply-chain companies to Qianhai. It will build expressways to connect the zone with three other logistics bases in Shenzhen and link these with inland provinces such as Yunnan, Guizhou, Sichuan and the municipality of Chongqing. "Integration of logistics and the financial sector is inevitable," Qu said. The city was exploring the possibility of providing financial and information management services to attract supply-chain companies. Xu Shouzhen, secretary general of the China Logistics Association, said the move was a sensible one provided that it integrated the mainland's growing demand for logistics services with Hong Kong's international expertise. But he said: "It will take time to gel when you consider the huge differences in laws and systems between the two." Some analysts were sceptical. Dr Fang Zhou, assistant chief researcher at the One Country Two Systems Research Institute in Hong Kong, said Shenzhen was a bigger competitor to Hong Kong than Shanghai, as they were both vying for the same business. "In fact, ports in Hong Kong and Shanghai aren't competitors because they provide services for different deltas," Fang said. But Hong Kong and Shenzhen could both benefit if they could plan their resource integration, he said. James Sun, the new chairman of the American Chamber of Commerce in Hong Kong, said the chamber would make its participation in China's 12th five-year plan a priority. Giving his inaugural address, Sun said: "We think the 12th five-year plan's chapter on Hong Kong has great merit. "It should be studied as a roadmap for identifying business opportunities for our member companies both in China and Hong Kong." Shenzhen's announcement came as the governments of Hong Kong and Guangdong held their annual meeting yesterday, with both sides pledging to work closely and implement integration measures agreed to earlier. Chief Secretary Stephen Lam Sui-lung and Guangdong Vice-Governor Zhao Yufang signed a pact listing 86 co-operation tasks for the coming year. On Qianhai's development, Lam said Beijing should finalise details of the taxation arrangements so Hong Kong businesses could set up as soon as possible. Zhao, meanwhile, promised that they would take measures to prevent pregnant mainland women from coming to Hong Kong through illegal channels to give birth.

MTR Corp's two residential sites at Tsuen Wan West MTR station yesterday attracted 12 bids from developers, but surveyors said they expect the offers to be conservative, given weak market sentiment. An MTR spokesman said the larger site, Bayside, drew four bids, while the smaller one, Cityside, attracted the other eight. Sun Hung Kai Properties (SEHK: 0016) and Cheung Kong (Holdings) (SEHK: 0001), the city's two largest developers, are among developers to have submitted bids for both sites. New World Development teamed up with Nan Fung Development and Wheelock (SEHK: 0020) Properties to bid for both. Sino Land joined the bidding for the Bayside site and formed a consortium with K Wah International for the Cityside site. The Cityside site also attracted a bid from Henderson Land (SEHK: 0012). Kerry Properties (SEHK: 0683), China Overseas Holdings and Chinachem Group joined the bidding, but did not disclose which sites they were bidding for. Alnwick Chan Chi-hing, head of valuation and professional services at Knight Frank, said it was a good sign that the tender could attract four or five consortiums to bid. "But I suspect their offers will be conservative because the mood of the market is bearish. Also, the two sites have noise pollution problems, and involve hefty investment costs," he said. He estimated that the Bayside site was worth about HK$8.9 billion, or HK$4,000 per sq ft, and that the Cityside site was worth about HK$2.66 billion, or HK$3,200 per sq ft. The two sites are close to Tsuen Wan's Riviera Park. Bayside, on the waterfront, has a better view and the 460,699 sq ft site is likely to yield nine residential towers with a residential floor area of 1.8 million sq ft and a commercial floor area of 436,480 sq ft. The Cityside site has an area of 144,238 sq ft and could yield five residential buildings with a residential floor area of 711,651 sq ft and a commercial floor area of 120,664 sq ft.

 China*:  Jan 13 2012 Share

Premier Wen Jiabao will visit three key Middle Eastern oil and gas suppliers - Saudi Arabia, the United Arab Emirates and Qatar - from the weekend, amid signs that Beijing wants to expand its options in the face of US sanctions aimed at Iran. The Foreign Ministry said yesterday Wen (pictured) would meet host leaders including Saudi Arabia's King Abdullah to "thoroughly exchange views on developing bilateral relations and on international and regional issues of common concern". Wen's six-day trip comes as Iran faces tightening Western sanctions over its nuclear programme. Beijing faces pressure to go along with the US sanctions by cutting what it pays for Iranian oil, if not the volume it buys. China already cut imports from Iran for January and February in a dispute over contract terms, and has been looking for alternative supplies. Wen's talks are sure to cover energy co-operation, at least in general terms, said Lin Boqiang of the China Centre for Energy Economics Research at Xiamen University. "On any visit to the Middle East, these issues will be discussed," Lin said. "Generally, there will be something that comes out of a visit like this, because a visit by a premier is not your average visit." China bought a combined 1.15 million barrels per day (bpd) from Saudi Arabia, the United Arab Emirates and Qatar in the first 11 months of last year, customs data showed, nearly a quarter of its total crude imports. The ministry did not mention any possible energy or investment deals during Wen's six-day Middle East trip. But on Sunday, oil giant Saudi Aramco said it would sign a final deal next week to build a 400,000bpd refinery with Sinopec (SEHK: 0386) Group. Wen's trip, which starts in Saudi Arabia, was planned long before the recent ructions over Iran, but will give Beijing an opportunity to consolidate ties with major Arab partners, said Li Guofu, of the Centre for Middle East Studies at the China Institute of International Studies in Beijing. "Definitely, these three countries are major suppliers of oil and gas to China, and how to increase this kind of co-operation would be a major topic whenever they meet," said Li. Aramco said the formal signing of its deal with Sinopec would take place on January 14. Under the initial agreement, Aramco will hold a 62.5 per cent stake in the joint venture formed to develop the project, and Sinopec will own the rest. Saudi Arabia is already China's top international source of crude oil. Angola and Iran were the second and third biggest suppliers last year. Qatar is a major supplier of liquefied natural gas to China. Lin said the central government would not turn solely to other Middle Eastern countries, which might also be vulnerable to regional tensions, to bolster any downturn in crude orders from Iran.

US Treasury Secretary Timothy Geithner meets with China's Vice-President Xi Jinping at the Great Hall of the People in Beijing on Wednesday. US Treasury Secretary Timothy Geithner met China's leaders on Wednesday to try to resolve yawning differences over sanctions on nuclear aspirant Iran, a major supplier of oil to the mainland. Geithner’s visit, which will also take in Japan, comes amid escalating international tensions over Iran’s nuclear ambitions and a day after the United States accused Tehran of “blatant disregard for its responsibilities”. New US sanctions intended to put further pressure on Iran bar any foreign banks that do business with its central bank – responsible for processing most oil purchases in the Islamic republic – from US financial markets. But Geithner is likely to encounter strong resistance from China, which buys 20-22 per cent of Iran’s crude oil, and has repeatedly opposed the sanctions. Vice-Foreign Minister Cui Tiankai warned this week against linking China’s trade relations with Iran with Tehran’s nuclear programme, saying Beijing’s “legitimate concerns and demands should be respected”. A senior mainland diplomat went further, warning of disastrous consequences if the Iranian nuclear row escalated into conflict. “Once war starts in this region not only will the relevant nations be affected and attacked, it would also … bring disaster to a world economy deep in crisis,” said Chen Xiaodong, a top diplomat concerned with Middle Eastern affairs. Meeting Vice-President Xi Jinping, who is tipped to take over as China’s president next year, Geithner said the United States wanted to build trade ties with the world’s second largest economy. “We are looking forward to exploring opportunities to expand our exports to China and strengthen and deepen our co-operation with China on a broad range of economic and strategic issues,” he said. “On economic growth, financial stability around the world, on non-proliferation, we have what we view as a very strong co-operative relationship,” he added. Geithner is also expected to raise the issue of China’s currency in meetings on Wednesday with Xi and with Premier Wen Jiabao. Washington argues that Beijing’s decision to keep the yuan artificially low fuels a flow of cheap exports that helped send the US trade deficit with China to more than US$270 billion in 2010. But the sanctions are likely to top the agenda for his visit, which comes in the same week the UN atomic watchdog said Iran had begun enriching uranium to up to 20 per cent at a new plant in a fortified bunker sunk into a mountain. Iran, which insists its nuclear programme is for exclusively peaceful purposes, has repeatedly said it will not abandon uranium enrichment despite four rounds of UN Security Council sanctions demanding Tehran desist. US Secretary of State Hillary Clinton said on Tuesday the confirmation Iran was enriching uranium was “especially troubling”, again calling on Tehran to cease all such work. Russia, which has relatively close ties with Iran, has also voiced concern over the new plant, while China’s foreign ministry said on Monday it had noted the reports. China said this week Premier Wen would visit Saudi Arabia, Qatar and the United Arab Emirates, as the West’s stand-off with Iran intensified, pushing up oil prices. Britain and France are also pushing for stronger economic sanctions to be imposed on Tehran to force it to abandon its nuclear programme, and European foreign ministers are set to agree on tougher sanctions later this month. Tehran has threatened to block the strategic Strait of Hormuz if oil sanctions are imposed over its nuclear programme, sparking concern in both China and Japan, which depend heavily on Iranian oil. Japan’s Foreign Minister Koichiro Gemba, on a Gulf tour to seek assurances over oil supplies, said Tuesday he was “very concerned about the latest developments”. Japan’s needs for oil and gas have increased after a massive earthquake and tsunami caused devastation and sparked a nuclear power crisis last March. The majority of its 54 nuclear reactors are now shut down. Iranian oil accounted for nearly nine per cent of Japan’s power needs in the first 11 months of last year – an issue that Geithner is expected to discuss with Japanese leaders. The treasury secretary will hold talks with Prime Minister Yoshihiko Noda and Finance Minister Jun Azumi in Tokyo on Thursday.

Overseas Chinese look for love at home - A man kneels down and asks a woman to become his girlfriend during a dating activity on Jan 8 co-organized by Beijing's Chaoyang district federation of returned overseas Chinese and dating website More than 150 Chinese who have returned from overseas took part in the activity. Leo Han (alias), a 30-year-old marketing analyst in Seattle, confesses that he is not much of a housekeeper. "I never cooked before I came to the United States," Leo said. "My mom never even let me touch the dishes when I was young. They wanted me to spend every second studying." That's why Han says it is essential that any girl he marries knows how to cook and clean. Now that Han has settled into a career as a senior marketing analyst for a world-renowned company, he is looking to marry, but like many overseas Chinese born on the mainland, he is finding it difficult to meet a match abroad. "Women here like to do the same things as men do," Han joked. "They even blamed me for not being able to have a baby." Han said he prefers a traditional woman like his mother. "I would like to have a warm home like the one I remember from my childhood," he said. "When my dad came home from work, my mom already had food waiting for him." Zhang Yu, the organizer of a dating group that includes about 80 singles, agreed that housekeeping ability was an essential characteristic for Chinese men who are looking for wives abroad. He told China Daily that Chinese men abroad are usually busy with work and seek someone to take care of the household. However, in many countries, it is expected that the whole family shares the housework, he added. Dong Sang, a 24-year-old student in Ibaraki-ken, Japan, said that more than 50 percent of Japanese women stay at home after they are married, and this trend has left a great impression on Chinese students studying there. Liu Han, a fashion buyer at Louis Vuitton in Beijing, dismissed the notion that women should be solely responsible for the home: "It is time that all people are (considered to have been) created equal instead of all men." Liu never cooks, and her boyfriend enjoys their lifestyle. "We can hire someone to help us," Liu said. "They are more professional than I." After going through two failed relationships since 2004, Leo started considering looking for a wife back in China. According to a survey by the Pew Research Center in 2010, 40 percent of Asian female newlyweds married outside their race in 2008. But according to the data, at least 80 percent of Asian males married an Asian female in the United States, and Chinese make up the largest portion of the Asian-American population. Thus, Chinese brides are short in demand in the marriage market in the United States, which leads many Chinese men to hunt for wives the traditional way back in China: blind dates. Traditionally, parents arranged the marriages of their children, and young couples could not even meet each other before the wedding. Now, the tradition lives on, albeit in a different form. For instance, Leo Han started a series of blind dates over the Christmas holiday in the northeastern city Harbin. He plans to take a bride back to Seattle if the relationship is still going well after one year. When asked how he will communicate to maintain his relationship, Leo said it will be easy with the Internet and other forms of modern communication. "We can use Skype, or QQ," he laughed. "It would have been hard to imagine before." Leo met a total of seven women introduced by family and friends. "I don't need them to be super pretty," Leo said. "I expect them to pay more attention to family rather than socializing with other single men at parties." However, Leo admitted that attractiveness was indeed a factor during the blind dates. "I can't know how the woman will behave in the future after the first meeting," he said. "A beautiful face is the only thing that I can know for sure." Now that Leo has gone back to the United States, he is still keeping in touch with two women. Leo's family was easily able to find seven women, but some must turn to a professional company to hunt for wives. Lu Yanxia, a relationship consultant at, a dating website, told China Daily that she had four to five male clients residing overseas at the same time. The average price ranges from 50,000 yuan ($ 7,940) to 150,000 yuan ($23,700) and depends on the difficulty of finding a wife. For example, a client who is 168 centimeters tall has to pay more than a 178-centimeter client because it will be easier to find a wife for the latter, Lu said. Following the trend, popular Chinese TV dating game shows, such as Fei Cheng Wu Rao, based on the Australian show Taken Out, have hosted special performances overseas to serve clients there.

After celebrating the 30th anniversary of its China operations last year, Nike plans to boost infrastructure spending by establishing its new corporate headquarters in Shanghai's Yangpu district to support the rapidly growing business in its second-largest market after the United States. The sporting goods giant yesterday said it signed a long-term lease for an undisclosed amount with Tishman Speyer, which will build a complex spanning 54,575 square metres at the Springs, a high-end residential and office project. The strategic investment follows steady gains in Nike's mainland, Hong Kong and Taiwan operations. Last year, the company reported for the first time revenue of more than US$2 billion in China for its financial year to May. "This new headquarters will allow us to elevate and expand on our facilities and capabilities, while bringing all of our Shanghai-based employees together from our portfolio of Nike brands into one central campus," said Craig Cheek, a general manager at the firm's China operations. On completion in 2014, the Nike complex will include up to three office buildings, a soccer pitch and a basketball court. By comparison, Nike's global headquarters in Oregon comprise 17 buildings with an area of 185,806 sqmetres. The new Shanghai campus would follow the opening of Nike's largest logistics centre in Taicang, Jiangsu province, in February last year, which handles all inbound and outbound Nike products. Hans van Alebeek, the vice-president of global operations and technology at Nike, said the logistics centre "is helping to redefine how large-scale facilities can operate more sustainably" on the mainland. The centre aims to reduce overall energy consumption with industry-leading features such as a highly reflective roof, energy management system, vacuum sewerage and use of natural light. Nike's new Shanghai headquarters is expected to provide similar "green" features, with international architects and environmental consultants involved in the project. The company designs, markets and distributes athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. It posted US$5.7 billion in global revenue in its financial quarter to November. Its subsidiaries include Converse, Cole Haan, soccer brand Umbro and youth lifestyle-focused Hurley International. "When we broke ground for the Springs in June [last year], we were confident that world-class companies would recognise the value and importance of establishing a presence in Shanghai," Tishman Speyer co-chief executives Jerry Speyer and Rob Speyer said. "The creation of the Nike greater China headquarters at the Springs underscores the strength of the [Shanghai] market." Covering an area of 900,230 sqmetres, the Springs represents the largest mixed-use development on the mainland for New York-based Tishman Speyer.

Lanterns forming the shape of a dragon light up downtown Beijing yesterday. The dragon lantern, at 39 meters long and 13.25 meters high, breaks the world record as the biggest lantern formation in the world. The Chinese New Year that starts on January 23 is the Year of the Dragon. The dragon is the only mythical creature to feature in the 12-year cycle of animals which appear in the Chinese zodiac related to the lunar calendar.

The Huawei Ascend P1 S mobile phone is displayed at the annual Consumer Electronics Show in Las Vegas on Monday. Chinese telecoms giant Huawei, seeking to expand its presence in the United States and Europe, unveiled the world’s slimmest smartphone on Monday. At 6.68mm, the Ascend P1S is thinner than the width of a pencil. Apple’s latest iPhone, the 4S, by comparison, has a thickness of 9.3mm. Huawei Device chairman Richard Yu said the Ascend P1S combines being the slimmest smartphone in the world with “high performance.” “It’s very convenient, very comfortable in your hand,” Yu told a press conference on the eve of the annual Consumer Electronics Show (CES) in Las Vegas. Yu said he expected the Ascend P1S, which is powered by the latest generation of Google’s Android software, to go on sale in Europe in March and the following month in the rest of the world, including the United States. He said the company was still negotiating prices with telecom carriers but he expected the device to sell for around US$400. The Ascend P1S features front- and rear-facing still and video cameras and a 0.92-centimetre screen. Yu acknowledged Huawai is not well known for high-end devices in the United States but he hoped the Ascend P1S would help change the image of the company. “Our problem is our brand is not recognised by many people,” Yu said. “We need to do some branding in the US market.” Huawei, founded more than 20 years ago by Ren Zhengfei, a former People’s Liberation Army engineer, is at the forefront of Chinese efforts to shift from being the world’s workshop to being the creators of genuine global brands.

Shanghai government will support building more international schools and give subsidies for children's tuition to high-end foreign professionals in the next four years to boost the city's ability to attract overseas talent. "Local authorities are now working on the development framework to facilitate children of foreign families working in Shanghai, as children's education is one of the major concerns for foreign professionals," said Mao Dali, deputy director with the Shanghai Human Resources and Social Security Bureau. His statement came in a news release on the city's plans in the headhunter campaign to lure more overseas professionals. The official said the new campuses would spring up in districts where they are most needed and that they would negotiate for lower tuition costs. "We have heard some foreigners complain about the high tuition fees at local international schools," Mao told Shanghai Daily. "While the price is decided by the special market, offering special incentives could be a way to ease the pressure." The bureau also said it would improve the system to make it more convenient for overseas professionals to register their children for entrance exams for admission to Chinese public middle schools and universities. In another move, efforts will be made to improve overseas commercial medical insurance, officials said. Foreigners who have bought medical insurance from overseas insurers now can claim their medical expenses only at certain hospitals. The government plans to increase that number during the next four years. This would require the hospitals to be accredited by insurers, and related agreements. "Local authorities are aiming to establish a settlement system for those buying foreign medical insurance to claim their local medical bills. The government will try opening channels between local hospitals and overseas insurers to set up cooperation in this regard," Mao said. "Many foreign workers in Shanghai have purchased commercial insurance, and if their local medical expenses could be conveniently covered by the foreign insurers, that would be a major attraction," said Tang Yi, a lawyer specializing in foreign-related labor dispute lawsuits. The city aims to attract 1,000 high-end foreign professionals.

China's export growth slowed in December, reflecting weakening global demand amid euro zone woes. Overseas shipments expanded 13.4 percent from a year ago, slowing from a 13.8 percent increase in November, the General Administration of Customs data showed today. Imports gained 11.8 percent and trade surplus stood at US$16.52 billion, compared with US$14.5 billion in November, the customs said. For the whole year of 2011, China's trade surplus narrowed 14.5 percent year-on-year to US$155 billion amid growing imports and weakening external demand due to prolonged European debt crisis. China's exports to developed countries remained flat but stable, while shipments to the emerging markets increased rapidly, the customs said. China's total trade topped a record US$3.6 trillion in 2011, up 22.5 percent from 2010. 

China's film watchdog indicated plans to cap movie-ticket prices in a move meant to create more access to cinemas. Such a cap has the potential to stifle the industry at a time when it is booming, some industry executives said. China's State Administration of Radio, Film and Television, known as Sarft, may impose a price cap on tickets and may require theaters to show more half-price screenings, according to a report Monday in the state-run Xinhua News Agency. The report didn't say when regulators plan to implement pricing changes or offer additional details, adding that Sarft plans to issue pricing guidelines for theaters this year. The move would be an attempt to make moviegoing more affordable to the general public, the report said. Complaints about high movie prices have grown over the past year. The cost of a movie ticket in China can range from 20 yuan to 100 yuan—or about $3.17 to nearly $16—depending on location. The average price in 2010 was around 40.40 yuan, or $6.40, according to the most recent data from media research firm EntGroup. Xinhua reported that the average movie-ticket price in 2010 was $5.30, in comparison to an $8 ticket price in the U.S. Prices in China represent a heavier burden on consumers, who earn less in monthly household income, the report said. It is unclear how the rules, if implemented, would affect the film industry. Theater companies such as Imax Corp.—which specializes in large format screens— have been rapidly expanding across China to boost their revenue. An Imax spokesman couldn't be reached for comment. Industry insiders say the move could potentially threaten the industry at a time when it is rapidly growing. Sarft estimates that China's box-office revenue from 2011 rose 18% to about 12 billion yuan, or nearly $1.9 billion, from 10.17 billion yuan in 2010. Limiting film prices would seemingly contradict China's push to bolster its domestic film industry. China has been championing efforts to build film production companies that can rival Hollywood and expose Chinese culture overseas as Beijing seeks increase its soft power to match its growing economic and military might. The government set a goal to build 20,000 screens nationwide by 2015 from around 9,000 today, according to EntGroup. But experts say China also wants to maintain full control. In recent months the Chinese government has taken other actions to rein in aspects of China's media landscape that it finds problematic. Regulators this month enacted new laws eliminating more than two-thirds of prime-time entertainment programs, such as dating and reality shows, on satellite television, targeting what they call "excessive entertainment and a trend toward low taste." Authorities have encouraged broadcasters to air more news and educational programming. "It's not about creating a thriving, creative industry," said one film executive. "It's about creating a way to guide the direction of the culture." In mid-December, the Legislative Affairs Office of the State Council, the country's cabinet, drafted laws to ban socially disruptive film content. Movies that "propagate obscenity, gambling, drug abuse, violence, and terror" would be prohibited along with those that promote religious fanaticism, disturb social order, and spread evil cults and superstitions, the draft said. Officials haven't stated when or if the draft laws will go into effect. The ticket price cap proposal may also be aimed at limiting ticket pricing and profit disputes between distributors and cinemas. Distributors of the film "The Flowers of War," China's most expensive movie made and its Academy Award entry for best foreign-language film, announced prior to its December release that it would increase ticket prices by five yuan, requiring a minimum price of 40 yuan, and maintain the right to 45% of its profits, limiting the profits of cinemas, according to the state-owned newspaper China Daily. Film regulators stepped in to mediate the dispute, the report said.

A women is escorted by armed police officers as she walks to a bank o deposit 300,000 yuan ($47,600) in Guilin, the South China's Guangxi Zhuang autonomous region, on Sunday. In response to an incident in which a man was killed outside a bank after withdrawing money in Nanjing, Jiangsu province, on Friday, the Guilin police began offering escorts to those depositing or withdrawing larg sums of money in the city. Those in need of the service can access it by dailing 110. 

China-bashing in GOP election campaign 'no cause for concern - Republican presidential candidate and former Utah governor Jon Huntsman smiles as he drives away from a campaign stop on Sunday in Hampstead, New Hampshire. Polls show Huntsman gaining on front runner Mitt Romney ahead of Tuesday's primary. Criticism of China has again become a feature of the US presidential election campaign, but tough rhetoric on the campaign trial will melt away after polling day, analysts said. In the latest scenario, Republican presidential candidate and former ambassador to China Jon Huntsman was labeled as "un-American" for adopting daughters from China and India, said CNN. And in Saturday's primetime debate among the candidates, Republican presidential candidate Mitt Romney turned rival Huntsman's service as US ambassador to China against him, according to AFP. Analysts said due to the changing balance of power between the United States and China, US presidential candidates tend to propose tough policies on China and make China an eye-catching topic to gain votes. Shen Dingli, director of the Center for American Studies at Shanghai-based Fudan University, said the presidential candidates have no other choice but to criticize China in the election, as the US is in a phase of relatively rapid decline. "But such criticism is only made for the purposes of the election campaign, and the winner of the election would return to rational policies on China after assuming office," Shen told China Daily. According to CNN, an amateur video posted on YouTube last week by self-described Ron Paul supporter "NHLiberty4Paul" questions Huntsman's "American values", shows Huntsman speaking in Mandarin and calls him the "Manchurian Candidate". The Manchurian Candidate, written by Richard Condon in the 1950s, is a political thriller about the son of a prominent US political family who is brainwashed. The novel has been adapted twice into a feature film in 1962 and 2004. The ad also shows images of Huntsman with his two adopted daughters - one from China and the other from India, said CNN. Fellow Republican presidential contender Paul told CNN that he disavowed the ad and had no control of his supporters' actions. "Of course I denounce it ... but people do that, and they do it in all campaigns," Paul said. Huntsman's Chinese daughter Gracie Mei was abandoned in a vegetable market and taken to an orphanage as a newborn. Now 12, Gracie Mei is a fixture of the Huntsman campaign. Huntsman often refers to her as his "top foreign policy adviser". The Huntsmans adopted Asha Bharati from the western Indian state of Gujarat in 2006. In all, the Huntsmans have seven children. Huntsman was the US ambassador to China from August 2009 to April 2011. During the primetime debate on Saturday, Huntsman said Romney's policies would start a trade war with China, according to the Associated Press. Huntsman says tough talk and new tariffs aren't the answer, and told Romney in Mandarin that he doesn't understand the situation. The Iowa caucuses on Jan 3 formally kicked off the 2012 US presidential election campaign, which will last until the national poll on Nov 6. Shen from Fudan University said China doesn't have to care too much about such criticism during an election year, and no reaction to the US election campaign is the best way to guarantee a smooth transition in bilateral relations in 2012.

US Treasury Secretary Timothy Geithner will arrive in Beijing on Tuesday to discuss economic ties and exchange views with Chinese leaders on the global economic situation. During his two-day visit, Geithner will meet Premier Wen Jiabao, Vice-President Xi Jinping, Vice-Premier Li Keqiang and Vice-Premier Wang Qishan, Foreign Ministry spokesman Liu Weimin said at a news conference on Monday. "The global economic and financial situation is facing severe challenges. Further strengthening of China-US economic and trade cooperation will be helpful in meeting these challenges," Liu said. Analysts said Geithner's visit will be an opportunity for Sino-US relations to regain momentum following Washington's high-profile "return to Asia" in 2011, but it's unlikely Geithner will achieve big breakthroughs in bilateral economic issues and global issues such as the latest sanctions on Iran. According to a media release on the website of the US Treasury Department on Jan 4, Geithner will highlight issues on his China trip, including the state of the global economy, policies to strengthen global growth and other economic issues of mutual importance. Geithner will also discuss the US' continued coordination with international partners to increase pressure on the government of Iran, including financial measures targeting the Central Bank of Iran, it said. Niu Xinchun, a researcher on US studies with the China Institutes of Contemporary International Relations, said in this US election year, the most pressing issue is economic recovery. Niu said there is no doubt that Geithner will discuss issues such as financial stability, economic rebalancing and trade deficits with the Chinese side, "but the possibility is slim that there will be concrete progress". But Niu said that sanctions on Iran will be the focus of Geithner's trip. Washington's tough stance toward Iran comes as the new US defense strategy unveiled on Thursday intends to assert Washington's position in the Asia-Pacific region, according to the Associated Press. The document says the growth of China's military power must be accompanied by greater clarity of its strategic intentions to avoid causing friction in the region, said AP. "We have noted that the US issued this guide to its defense strategy, and we will closely observe the impact that US military strategic adjustment has on the Asia-Pacific region and on global security developments," said Defense Ministry spokesman Geng Yansheng. " US accusations against China in this document are totally groundless," said Geng, adding that the US should be "careful in its words and actions" and view China and Chinese military in an objective and rational way. "The strategic objective of Chinese defense and military construction is consistent and clear. China's peaceful development is an opportunity instead of a challenge for international community, including the US," he said. The new US defense strategy was widely interpreted as an attempt to boost strength in Asia and to counter China's growing power in the region. Under the new strategy, the US will maintain large bases in Japan and South Korea, and deploy US Marines, navy ships and aircraft to Australia's Northern Territory.

Hong Kong*:  Jan 12 2012 Share

The Chief Justice plans to press for changes to the law to remove an “anachronism” that gives litigants in a civil case involving HK$1 million or more an automatic right of appeal to the highest court. As well as being an outdated colonial remnant it is a waste of valuable Judiciary resources and delays the progress of more deserving cases in the Court of Final Appeal, Geoffrey Ma Tao-li said. Speaking on Monday at the ceremonial opening of the new legal year, Ma said a majority of appeals heard by the highest court by this route had been “totally unmeritorious”. “This provision is a remnant of the colonial practice that had existed for over a century prior to 1997 when the final appellate body for Hong Kong was the Judicial Committee of the Privy Council in London,” Ma said. “Very few, if any, other common law jurisdictions now have this automatic right of appeal. It is an anachronism.” He said that “at an appropriate time” he would press for changes to the law that would make such cases subject to appeal “as all other cases are”. Ma also said more work needed to be done to simplify “unnecessarily complicated” court procedures to enable litigants to resolve their disputes more easily. This was one of three areas the Chief Justice listed for action to improve access to justice, the other two were extending the legal aid system, and the provision of free services by the legal profession. “Legal aid is perhaps the most tangible form of enabling persons to gain access to justice. Obviously, if legal aid were to be extended this would be beneficial but one must recognise that public resources are limited,” he said. For the profession, he noted that it had become “more than receptive” in recent years to the idea of provision of free services, citing the Law Society’s pro bono (performed voluntarily and free of charge) legal services scheme that he said encouraged solicitors to “give something back to the community”. “My wish … is that the idea of pro bono services will become even more visible in the years to come,” Ma said. Speaking at the same ceremony Secretary for Justice Wong Lan-yung rejected any notion that last year’s landmark judgment on state immunity from litigation – known as the Congo case – would extend absolute immunity in Hong Kong courts to mainland state-owned enterprises. “Views such as those ... are misconceived as a mainland state-owned enterprise is simply not an entity of a foreign state,” Wong said. In a judgment handed down on September 8, the Court of Final Appeal, after seeking an interpretation from the National People’s Congress Standing Committee, confirmed an earlier provisional ruling that a country’s commercial activities are immune from litigation in Hong Kong. The ruling stemmed from a debt dispute between the Democratic Republic of Congo and United States-based fund FG Hemisphere Associates that triggered an argument over whether Hong Kong should follow Beijing’s practice of absolute immunity or could continue with its pre-1997 regime that denied immunity to states in commercial deals. The court ruled that it should follow Beijing’s practice.

Li & Fung Group staff (from left) Carman Man Lai-ka, Deneille Dewar and Johnny Lam Tze-lok collected used books to give to needy children. Li & Fung Group's staff flexed their muscles and used their creativity to make the group's first year as a major donor to Operation Santa Claus a huge success by raising HK$180,000. Wong Kai-man, director of the Li & Fung (1906) Foundation, the group's charity, said the group supported OSC because the campaign encouraged staff to volunteer to help others and become familiar with their struggles. He said the foundation would match all donations made by staff. "We not only want to help our community by donating money, but we also want to engage our staff," Wong said. "And participating in OSC fulfils both of our objectives." In the first corporate sports day organised for OSC, Li & Fung staff formed six teams - the most out of the nine participating corporations - and took home the award for most supportive company. The team comprising staff from Toys `R' Us - part of the Li & Fung Group - was first runner-up in the four rounds of games. Johnny Lam Tze-lok, senior operations training officer for Toys `R' Us, took the lead in recruiting his colleagues to join the sports day team. "Our colleagues are young and agile, so we were very interested in taking part," he said. "We were not there to win, but to have fun and raise money for charity." Wong said many of the foundation's community initiatives were closely related to Li & Fung's line of work, and could therefore make good use of staff expertise in implementing effective and innovative improvements in Hong Kong. For example, volunteers had been using their construction skills to restore the wooden walkways of stilt houses in Tai O to make them safer for the elderly. The Li & Fung (1906) Foundation focuses on disaster relief, community building, supporting social enterprises, business-related clean environment alternatives and entrepreneurship development. This year, the foundation also adopted a three-year initiative to support children and young people, and a major group-wide project will be targeting children in China and Cambodia. "It is not the first time we've given to children and youth," Wong said. "In the past, we have built primary schools in Vietnam and Cambodia, and we support some English teaching programmes in Hong Kong." Wong said in the future, the foundation might organise trips for the staff to meet the children they had been sponsoring. Deneille Dewar, of the corporate communications and design team at Li & Fung Trading, came up with an idea of collecting books that colleagues no longer wanted to give to those without access to books. "We all have books in our homes that we are not reading or our children have outgrown," she said. "Donating these books is a small gesture on our part, yet significant to a child who may otherwise not have access to reading materials. This campaign was a great way to engage colleagues across the group to give back and support a child on their life journey." By the end of the Christmas period more than 1,250 books had been donated. Staff sorted them into different reading levels and the logistics team will deliver them to the Hong Kong Federation of Youth Groups, Caritas Hong Kong, The Crossroads Foundation and Oxfam, who will pass them to beneficiaries. Jointly organised by the South China Morning Post (SEHK: 0583, announcements, news) and RTHK, Operation Santa Claus this year raised money for 16 Hong Kong charities. The final amount raised will be announced in the Post on January 19.

Hong Kong Airlines Limited has decided to delay its initial public offering, originally scheduled for early this year, until the third quarter because of stock market volatility, a company official said on Monday. The IPO, which the company had said was expected to raise about HK$5 billion (US$643.88 million), has been postponed as advised by Goldman Sachs Group, deputy general manager and company spokesperson Eva Chan told reporters. “Goldman recommended postponing the IPO a bit as they find the market volatile.” The Hong Kong-based carrier is controlled by Hong Kong Airlines Holding Limited, which counts Hainan Airlines and Hainan Airlines’ parent HNA Group among its top shareholders. The airline’s decision to delay the offering comes on the back of growing volatility in global equity markets that has sapped investor demand for new listings and caused a 51 per cent plunge in Asia-Pacific IPO issuance last year from 2010. The market could weaken further this year because of ongoing concern over recovery in Europe and other major economies, with consulting firm PricewaterhouseCoopersforecasting a 26 per cent drop in IPOs in Hong Kong this year. Such a development would dent the city’s status as one of the world’s main capital-raising hubs. Hong Kong Airlines, which currently has a fleet of 14 aircraft including six A330-200s and eight Boeing 737-800s, is taking delivery of eight to 10 aircraft this year, including two A330-200s this month, Chan said. The company, which will start daily flights between Hong Kong and London in March, had also ordered 10 A380 jumbo jets, which will be delivered from 2015, she added. The A380 super jumbo has a list price of US$375 million. Airbus is a subsidiary of European Aeronautic Defence and Space Company. The European Union’s launch of a new carbon trading scheme this year to include all airlines using EU airports will have no impact on the deliveries, Chan said. China’s major airlines have said they will refuse to pay any charges under the EU scheme, while other Asia Pacific carriers, already battling a weak travel market, are likely to pass on the extra cost to passengers. The Emissions Trading Scheme (ETS) was launched in 2005 as one of the major pillars of the bloc’s efforts to combat climate change. From January 1, all airlines using EU airports are included in the cap-and-trade scheme. Cai Haibo, deputy secretary-general of the China Air Transport Association (CATA), said last week that the industry body would not rule out taking legal action or resort to asking the Chinese government to take retaliatory measures. Hong Kong-based Cathay Pacific Airways (SEHK: 0293) and some other Asian airlines, facing a sluggish economy and weak cargo demand, said they may impose surcharges or increase airfares to counter the ETS impact.

The government's latest attempt to limit the immense amount of waste generated by Hongkongers is due to begin shortly, with a public consultation to gauge the public's appetite for paying a rubbish disposal fee. The consultation document, due to be released this week, will explain the purpose and methods of levying a fee for collecting and disposing of rubbish - although it's probably too early to suggest an exact fee level, according to a person familiar with the situation. "The issue goes well beyond how much will be charged," the person said. "It is also about overhauling the way people handle their household waste." The consultation document will highlight different ways of charging - including a fee based on the volume of rubbish discarded or a fixed fee like government rates. The latter, however, provides little incentive for people to cut back on their rubbish. Taipei and South Korea, among other places, have cut their disposed waste by up to half by charging for garbage bags. In Taipei, a five-litre bag costs 58 HK cents. A survey in 2009 by the Organisation for Economic Co-operation and Development found Hongkongers were the most wasteful among 30 economies surveyed, producing twice as much rubbish per capita (921kg) as people in Japan (410kg) and South Korea (380kg). Officials hope a dumping fee will give residents an incentive to separate their rubbish before disposal. There is no law in Hong Kong requiring people to do so. One thorny issue to be tackled is how to prevent illegal waste dumping after a charge is introduced. Another question is whether streets should continue to have rubbish bins, where people might dump waste to avoid the charge. Any changes would also have to address whether waste collection officers should be authorised to refuse to handle rubbish that has not been dealt with in the right way. The city disposes of an average of about 3.3 million tonnes of solid waste - excluding construction waste, for which charges are levied - in landfills every year. But the landfills will be full within this decade. About one-third of the rubbish, or 3,000 tonnes a day, is kitchen and food waste. Currently, the public does not pay directly for dumped rubbish; the expense, up to an estimated HK$1.8 billion per year, is borne largely by the government. It costs the Environmental Protection Department HK$337 per tonne, or 33 cents per kilogram, to haul rubbish from waste transfer stations to landfills. The figure rises to HK$549 per tonne, or 55 cents per kilogram, if collection costs incurred by the Food and Environmental Hygiene Department are included. Michelle Au Wing-tze, the senior environmental affairs officer with Friends of the Earth (HK), said most places that charged for waste collection did not aim to recoup all costs. A fee need not create a heavy financial burden if the main goal was to get people to sort their rubbish, particularly kitchen waste, she said. Even so, the new system would probably encounter some difficulties, she said. "It is too convenient for people to dump their rubbish now. It is all just steps away from homes. With a charge, that might have to be changed, too." In 2005, the Environmental Protection Department published a waste policy framework that aimed to introduce a rubbish fee by 2007. But that failed to happen as it said more studies were needed. Three years later, it launched an 18-month study on the ways of collecting the fee. But still, the department could not set out the way forward. Instead, the government has pushed forward plans to incinerate waste and expand landfills. Last month, the government's environmental advisory body approved of plans to build the world's largest incinerator, at a cost of between HK$8 billion and HK$13 billion, on Shek Kwu Chau, an island south of Lantau.

 China*:  Jan 12 2012 Share

General Motors CEO Daniel Akerson speaks in Detroit on the eve of the North American International Auto Show on Sunday. US automotive giant General Motors said on Monday its sales in China hit a record high last year, despite a broader slowdown in the world’s largest vehicle market. GM and its joint ventures in China sold around 2.55 million units last year, up more than 8.0 per cent from the previous record of 2.35 million in 2010, the company said in a statement. “GM stayed ahead of the competition despite a slowdown in the growth of industry demand,” Kevin Wale, president of GM China Group, said in the statement. China, which overtook the United States to become the world’s top auto market in 2009, has become increasingly important for global players such as GM and Germany’s Volkswagen Group. In December alone, GM’s sales in China rose 9.8 per cent annually to 196,797 units. The China Association of Automobile Manufacturers, which tracks car sales and production in the country, has yet to release figures for all of last year. However, association officials have forecast that annual growth for the whole of last year will be just five per cent, down from an earlier forecast of 10-15 per cent. Sales soared more than 32 per cent in 2010 but have since lost some steam amid a slowdown in economic growth and after China phased out incentives, such as tax breaks for small-engine vehicles. China has moved to protect its domestic auto industry in recent weeks, slapping import tariffs on some US passenger cars and sports utility vehicles, and saying it would “withdraw support” for foreign investment in the sector. But the lure of the massive market remains. Volkswagen said last week that it would build a new plant in the eastern city of Ningbo capable of producing 300,000 vehicles annually once the facility is completed by 2014.

Shareholders of China's leading domestic hot pot chain, Little Sheep Group Ltd (Little Sheep), have approved a takeover proposal by Yum! Brands Inc (Yum!), Yum! said in a press release on Friday. Under the proposal, Yum! will offer Little Sheep independent shareholders HK$6.50 (83.7 cents) per share, and will offer holders of options to subscribe to Little Sheep HK$4.39 per option to cancel these options. Yum! will proceed with its takeover process by seeking the sanction of the Grand Court of the Cayman Islands at a petition hearing on Jan 20. The arrangement is expected to go into effect on Feb 1, when Little Sheep will be privatized and become a Yum! subsidiary, the press release said. China's Ministry of Commerce in November 2011 approved Yum!'s proposed takeover of Little Sheep, which is listed in Hong Kong. Louisville, Kentucky-based Yum!, which owns KFC and Pizza Hut, bought a 20-percent stake in Little Sheep in 2009 and raised its shareholding to 27.2 percent last year. "We are pleased to see that the independent Little Sheep shareholders value the offer provided by Yum!," Jing-Shyh Sam Su, chairman and CEO of Yum! Restaurants China and vice president of Yum!, said in the press release. Hot pot is a traditional Chinese meal that people enjoy by sitting around a fondue-like pot of simmering water, dipping raw foods, such as thinly-sliced meats, fish, vegetables, and noodles, into the water to cook. Hot pot is a signature New Year's dish for many Chinese families both in and outside of China. "We have a strong commitment to the China market and to the Little Sheep brand. We are confident we can further strengthen Little Sheep's brand, business model and market position," he said. The China Cuisine Association rated Yum! and Little Sheep as the top two market players in 2010. Little Sheep, which focuses on hot pot, operates 3,000 restaurants throughout China and reports an annual revenue of 2 billion yuan ($315 million). Meanwhile, Yum! has nearly 3,500 KFC restaurants and about 560 Pizza Hut restaurants in China. Last year, the company's China division reported 33.6 billion yuan in revenue.

Time to practice a smile amid travel rush - Bullet train stewardesses hold a chopstick in their mouth to practice smiling for the Spring Festival travel rush in Chengdu, capital city of Southwest China's Sichuan province, Jan 6, 2012. The local rail authority organized the special training program for bullet train staff to improve their service during the travel rush which started on Sunday. Bullet train stewardesses practice an elegant sitting posture during a training program in Chengdu, capital city of Southwest China's Sichuan province, Jan 6, 2012. 

After two years of explosive growth, China's auto market cooled in 2011 as government tax rebates for small cars, trade-in subsidies and incentives for rural buyers expired. Full-year vehicle production and sales numbers will be released today by the China Association of Automobile Manufacturers. Both figures are expected to range between 18 and 19 million, increases of just 2 to 3 percent compared with the remarkable growth of 2010. Vehicle production and sales both hit 18 million units in 2010, a surge of 32 percent over 2009. In the capital city Beijing, where restrictions on new car license plates took effect at the first of the year, new car sales plummeted to less than half of the 800,000 sold in 2010. China's luxury car sales continued strong growth in 2011 despite increasing external market pressures. Segment leader Audi sold more than 310,000 vehicles in China last year, breaking the 300,000 benchmark for the first time. The number for the first time outstripped the company's sales in its home market. The carmaker plans to more than double its yearly output in China to 700,000 units after 2015. German premium brands BMW and Mercedes-Benz also performed well last year. Both are building capacity for long-term development and adding new products to their local lineups. In December they began small-volume export of long-wheelbase cars originally tailored for Chinese consumers and only built at their joint ventures in China. It was the first time China-made luxury vehicles were shipped abroad.

South Korean President Lee Myung-bak (L) shakes hands with officials after arriving at Beijing airport January 9, 2012. At the invitation of Chinese President Hu Jintao, President of the Republic of Korea (ROK) Lee Myung-bak arrived in Beijing Monday, starting his three-day state visit to China. During his visit, Lee is scheduled to hold talks with Hu and meet with top legislator Wu Bangguo and Premier Wen Jiabao. The two sides will exchange views on China-ROK relations as well as global and regional issues of common concern, respectively. This year marks the 20th anniversary of China-ROK diplomatic ties as well as a year of bilateral friendly exchanges. "China attaches great importance to President Lee Myung-bak's visit, and hopes his visit will further strengthen political trust, exchanges and cooperation between both countries, as well as further bilateral strategic cooperative partnership," Chinese Foreign Ministry Spokesman Hong Lei said. This is Lee's second state visit to China since he took office in February 2008.

The Ziyuan III satellite is launched from the Taiyuan Satellite Launch Center in northern Shanxi province on Jan 9, 2012. The satellite, a high-resolution remote-sensing satellite for civilian use, was launched at 11:17 am aboard a Long March 4B rocket, according to a statement from the center. The satellite, weighing 2650 kg, entered an orbit of 500 km above the Earth about 12 minutes after it was launched. It has a designed life expectancy of five years. According to the center, the satellite is tasked with offering services to aid the country's land-resources surveys, natural-disaster prevention, agriculture development, water-resources management, and urban planning. The rocket also carried a satellite from Luxemburg, according to the launch center. The orbiter was developed and produced by the China Academy of Space Technology, a subsidiary of China Aerospace Science and Technology Corporation (CASC). The Long March 4B rocket is developed by Shanghai Academy of Spaceflight Technology, another CASC subsidiary. Monday's mission marked the 156th flight of China's Long March series of carrier rockets.

Hong Kong*:  Jan 11 2012 Share

Patrick Rozario, of BDO Hong Kong, says companies might have to pay more to attract independent directors. Get one in, or kick one out? That's the dilemma many listed Hong Kong companies are facing as the deadline looms for them to rejig their boards of directors in compliance with a new listing regulation. By the end of this year, the city's companies will need to have at least a third of their directors "independent". A difficult task in itself, given the paucity of talent willing to take on these roles for the meagre pay usually on offer, it is bound to be even more complicated for companies with board sizes that are not a multiple of three. Patrick Rozario, partner and head of risk advisory services of accounting firm BDO Hong Kong, said many companies had been seeking its help on how to comply with the new rule. "Most listed companies have nine to 12 directors, and many have only about three independent directors," he said. "It is estimated that about half the small listed companies won't meet the new listing rules unless they reshuffle their boards. "Many will have to either add or remove a director, both equally difficult propositions. As the regulation will increase the demand for independent directors, it will get tougher to come up with the right people. And for those facing the opposite situation, where they have to kick a director out, it'll be a painful process." BDO surveyed the 232 largest listed companies and found 27 per cent have less than a third of directors who are independent. Rozario believes at least 500 smaller listed companies will be affected. At present, listing rules require firms to have at least three independent directors, but there is no regulation on the ratio. An independent director is one who does not work for the company and has no business relationship with it. They also cannot hold more than a 1 per cent stake in the company. Non-executive directors, on then other hand, are those who do not work for the company but have business ties to it. The move, seen as an important piece of corporate governance reform for 1,400-plus listed companies, is designed to match best international practices and will be an important step in strengthening the voice of minority shareholders. Rozario said the reform was needed as Hong Kong lagged behind other markets which had had similar, or tougher, requirements on independent directors for a long time. In the United States, for example, the majority of the board members must be independent, while Britain requires at least half the board, excluding the chairman, must be independent. Singapore and the mainland also require at least one-third of the board be independent. Kelvin Wong Tin-yau, the chairman of the Hong Kong Institute of Directors, said companies that couldn't find more independent directors would have to consider cutting the size of the board. "However, we think it is always better to hire more independent directors as they can contribute a lot to corporate governance and development," he said. Wong said one reason Hong Kong companies found it difficult to get independent directors was the low remuneration for such roles. On average, they receive HK$150,000 to HK$200,000 a year. In other developed economies, independent directors make about HK$500,000 a year. "If Hong Kong companies would pay more they would find it much easier to find professionals ready to contribute their time and effort," Wong said. "And if a listed company says it can't afford to pay more, one would have to doubt its financial soundness."

Both Henry Tang (left) and C.Y. Leung have pledged to help small and medium-sized firms. Barack Obama and Ma Ying-jeou have shown how economic turmoil can turn a popular politician into an embattled one. Now, with the example of the presidents of the United States and Taiwan in mind, the same prospect is facing Hong Kong's next chief executive, who will be chosen by a 1,200-member Election Committee on March 25 and take office on July 1 amid pessimism over the global economic outlook. Government figures released in November show the city's economy grew only 0.1 per cent in the third quarter of last year from the previous three months. Chief Executive Donald Tsang Yam-kuen warned that economic growth could shrink to 2 per cent in 2012, compared with a forecast of 5 per cent for the full year in 2011. He has repeatedly warned that the city's economic growth would slow down this year because of stagnant recovery in the US and the deepening debt crisis in Europe. Against this backdrop, the two front runners to replace Tsang - Henry Tang Ying-yen and Leung Chun-ying - have vowed that if elected, they will do whatever is feasible to help the business sector weather the economic uncertainties. And, naturally, they both promised to be the right person to lead Hong Kong to a brighter economic future. At his election rally last month, Tang promised "to do the best preparations for the worst scenario", saying that his nine years' experience in the administration had given him a proven track record in tackling economic downturns. Tang served as the minister for the Commerce, Industry and Technology Bureau [which was restructured in 2007] between 2002 and 2003, and then became financial secretary between 2003 and 2007. "We fought off economic downturns and turned our budget deficit into a surplus ... we managed to reduce the unemployment rate from over 8 per cent [in 2003] down to 3 per cent [in 2011]," he said. Leung's motto is: "Seeking change while preserving stability." He vowed that his government would play a more active role in assisting enterprises to explore business opportunities on the mainland and overseas. But a proven track record might be what Leung lacks. Despite serving in the inner circle of the government's policy-making body - as a member of the Executive Council since the handover in 1997 and its convenor since 1999 - he has not served in any position in the city's administration, raising questions about his lack of experience. Professor Raymond So Wai-man, dean of the business school at the Hang Seng Management College, said Tang may have more experience than Leung in the administration. But the economic turnaround to which Tang referred could be attributed more to the general revival of the global economy rather than his own policies. "For example, Tang failed to broaden the government income sources when he was the financial secretary. Hong Kong is still heavily reliant on the revenue of land sale and stamp tax, while the tax base is still narrow," So said. He added that government income this year could still fluctuate amid the economic uncertainties. Both candidates have attended dozens of policy forums in the past few months to outline their visions. They said the survival of small and medium-sized enterprises (SMEs) - which employ more than 1.2 million people in the city's 280,000 firms - during an economic downturn would be their policy priority. Another policy item on which the two candidates have agreed is the reintroduction of a special loan-guarantee scheme to help SMEs secure lending from banks. The government initiated a HK$100 billion rescue plan in late-2008 that guarantees up to 70 per cent of loans companies receive from banks to save struggling businesses and protect jobs. Leung went further to suggest that the government should help the city's companies to capitalise on opportunities on the mainland. He proposed the formation of joint working groups comprising academics, representatives from the government and relevant industries to map out industrial policies. He also wants to strengthen the functions of Hong Kong Economic and Trade Offices on the mainland to help the city's companies there liaise with Beijing government departments and deal with red tape. Leung was also urged at a forum organised by the pro-business Liberal Party to restructure government bureaus and to pay more attention to the city's industrial development. He replied: "The term `industry' might not appear in the name of any bureau, but I would always bear this term in my mind." Wilson Shea Kai-chuen, president of the Hong Kong Small and Medium Enterprises Association, said the city's enterprises on the mainland have lacked support from the Hong Kong government when there are disputes with the mainland authorities. "Many entrepreneurs are facing unfair competition on the mainland and we don't know where to seek help from," Shea said. He urged the next administration to step up communication with the entrepreneurs and to understand their needs. Tang, the son of a Shanghai textile tycoon, said he has an advantage in understanding the difficulties encountered by entrepreneurs. "Because of my background in manufacturing, I understand how small and medium-sized businesses work. I understand that they are a vital part of our economy," Tang said. "Therefore, we will focus on real economy, giving special attention to SMEs and their potential to create jobs." Tang proposed restructuring the government bureaus by re-establishing the Commerce, Industry and Technology Bureau in the next administration. "I think that's a more integrated [government] structure to develop the city's economy," Tang added. Tang has also paid particular attention to developing innovation and technology-related businesses, in an effort to diversify the economy and to open up job opportunities for young people. Critics have said the city's economy is heavily reliant on the booms in the financial industry and the property market, meaning that the city's job market and the government's income can be vulnerable to external influences at times of global economic turbulence. There have also been calls for the government to diversify the economy by developing new industries to maintain the city's long-term economic competitiveness. In 2009, Tsang set up a task force to explore medium- and long-term economic opportunities in six new knowledge-based industries - testing, medical services, innovation, creative services, environmental services and education - to diversify the city's economy in the wake of the global economic crisis. But the government has since been criticised for the lack of follow-up policies, said professor So and Samson Tam Wai-ho, lawmaker for the Information and Technology sector. According to government figures in 2009, the six new industries have contributed only 8 per cent to the total GDP, compared to the 55.6 per cent contributed by the city's four key industries - financial services, tourism, trading and logistics, and professional services. Meanwhile, just 395,000 people, or 11.3 per cent, out of the 3.48 million workforce are working in the six new industries, compared to 1.65 million people - or 47.3 per cent - in the four key industries. The government could not provide more updated figures as a spokesman said the survey was conducted on an ad hoc basis after Tsang's proposal. Tang said the government should reposition itself as a "facilitator instead of an observer" to help the new industries to grow faster. He also proposed the setting up of specialised schools to foster young talents in new industries. He said graduates from local universities do not acquire the specialised skills required to address the ever-changing needs of the fast-growing industries. Leung also suggested setting up a new bureau to oversee the development of technological and creative industries. But neither candidate set a clear five-year target - in terms of the contribution to GDP and the number of people employed - for the new industry developments. Tam said he welcomed the initiatives proposed by the two front-runners, but was unsure about their commitment and the resources that would be allocated. "The track record [in promoting the IT industry] of both candidates has failed," said Tam. Professor So said it would be important for the next leader to find suitable ministers with strong political will to push the development of new industries. "In the US, we can predict the possible personnel in the next governing team according to the party line. Unfortunately, it's difficult to make such a prediction in Hong Kong, no matter who wins the top job," he said.

Children are not "little emperors" by choice - they are made that way by their parents, a survey suggests. Most older children possess basic life skills such as taking care of personal hygiene, using public transport and even cooking simple meals, a survey by the Chinese Young Men's Christian Association found. But more than 80percent of parents polled say such skills are not essential. "Most children do, in fact, show a great capacity to do many of the basic tasks of daily life by themselves, but many parents simply don't realize the importance of these skills," said Lee Man-key, coordinating secretary of the association's Tin Shui Wai Tin Chak Centre. The study of 1,018 primary students, aged between 9 and 11, and their parents found 98 percent of children are largely or fully capable of ensuring personal hygiene, with more than 81percent saying they can prepare basic dishes such as rice, egg or instant noodles. And well over 76 percent said they can use public transport on their own. But their parents' expectations are much lower. While 94percent thought having children tend to their own appearance is important, only 69.5percent thought basic cooking skills count. In addition, more than 84percent of parents do not think these skills are crucial to their child's development. "It is worrying that a majority of the parents do not see the significance of such personal life skills," association counsellor May Liu Yun-fang said, blaming the tendency to overly emphasize academic results. This has created the "little emperors" phenomenon, where sheltered children are treated like royalty by parents and domestic helpers. Lee said such children "can grow up being unable to face difficulties and do not develop problem-solving skills that are essential for daily life." To avoid this, Chow Wai-ying encourages her 10-year-old granddaughter to perform tasks such as showering and eating independently.

Pork sellers angry at supermarket chains offering 30percent discounts on fresh meat have threatened strike action. Accompanied by lawmaker Wong Kwok-hing, they said some retailers are forced to follow the price cuts to survive, even if they are doing so at a loss. They complain that supermarkets have been selling fresh pork at HK$29 per catty over the past eight weeks, while vendors at wet markets, who buy the meat at HK$26 per catty, sell for HK$32. Hong Kong Pork Traders General Association chairman Hui Wai-kin said the slashing of prices by supermarkets has seriously affected his members' livelihood. "Small pork retailers cannot sustain a living under the price discounts in supermarkets," Hui said. The average turnover of retailers has slumped 30percent or more in the past two months, while some stalls have closed, resulting in the loss of more than 30 jobs, he said. Hui fears that if the discounts continue, more than 70percent of 1,100 vendors will need to cut workers to stay afloat, and there may be more business closures after the Lunar New Year. Wong criticized the big stores for trying to monopolize the market. "We will present a petition and meet the supermarkets' representatives to [persuade them to] retreat from the price cuts. Support will also be sought from the three leading pork suppliers in Hong Kong," Wong said. "Moreover, we are going to urge the government to speed up the legislation process for a competition law, so as to create better living conditions for small and medium-sized pork retailers." Wong warned: "If our voice is not heard, more radical action will be taken, such as a strike, or demonstration at the supermarkets' headquarters." A spokesman for ParknShop said import costs of fresh pork have dropped since mid-November, and so the chain took the lead to lower retail prices. "We endeavored to combat inflation and pass the HK$22 million savings in import costs to customers over the past eight weeks," he said. The supermarket denied there is a market monopoly, saying: "ParknShop only accounts for [a small percentage] of the market share in pork, and traditional wet markets account for close to 70percent. The supermarkets' share can hardly support the allegation there exists a `supermarket hegemony."' The spokesman added: "The retail market in Hong Kong is very competitive and diverse. We can't dominate the market." A spokesman for Wellcome said its pricing of pork is determined by the usual market forces. "Since last November, some of the Wellcome mega stores have reacted with the market demand and offered discounts on pork," he said.

The protest came after a Facebook campaign was launched last week in response to an apparent ban on locals taking photos of the store. The rally attracted hundreds of people to the Canton Road outlet in Tsim Sha Tsui. Police monitored the situation but did not intervene.  Long queues massed along the luxury brand mecca of Canton Road yesterday - but the last thing on their mind was shopping. More than 1,000 people protested outside Dolce & Gabbana's elite Tsim Sha Tsui flagship, demanding an apology for alleged discrimination against locals banned from taking pictures of its storefront display. The Italian luxury fashion brand shut its doors before 3pm as the crowds gathered, and other shops nearby were also forced to shut. About 20 police stood on guard outside. The company issued a short, unsigned statement last night - without an apology - saying: "We wish to underline that our company has not taken part in any action aiming at offending the Hong Kong public." This came after camera-laden protesters descended on the store taking pictures and carrying placards denouncing the store's actions. Angry protesters chanted "Shame on you, D&G" and "Snapping pictures is our right. Banning is not your right" as passing motorists sounded horns. "Open the door. I have money and I want to do some shopping," said one protester, holding a fistful of hell banknotes. The protest was organized on Facebook, with the site drawing more than 15,000 "likes" since Thursday. Fury started to build last week after people, claiming they were told to leave while snapping pictures of the store from the roadside outside Harbour City, went online to vent their wrath. A security guard reportedly said only mainland tourists were allowed to take photos outside the store, and a D&G guard allegedly threatened to break journalists' cameras if they continued to take photos. A well-known mainlander, possibly a government official, was reportedly shopping in the store last month when he noticed people outside taking photographs. A complaint was made to D&G because the customer feared netizens would link the shopping spree to corruption. Then D&G instigated the ban. D&G's statement strongly denied making any racist or derogatory comments. "Controversial statements reported in the Hong Kong press have not been made by Dolce & Gabbana nor its staff. "It is regrettable that Dolce & Gabbana has been brought into this matter." Harbour City apologized on its Facebook page on Friday. D&G's store did not return calls yesterday and no one came forward to meet the protesters. Chief executive candidate Henry Tang Ying-yen said D&G should see taking photographs outside the store as a compliment. "People take photos because they like the products. The store should welcome this instead of turning people away." Tourism sector lawmaker Paul Tse Wai-chun said D&G should apologize for discriminating against locals and he will raise the issue in the Legislative Council.

Hong Kong Citizen resentment at loss of right of abode in Britian 'unnerving' - Murray MacLehose describes his belated realisation of the resentment of local colleagues who lost their right to live and work in Britain as "horrible" and "unnerving" in transcripts made public by Oxford University. He realised the "depth of resentment" among Hong Kong's elite when the Nationality Bill - which was passed in the British Parliament in 1981 to become the British Nationality Act - was discussed in the governor's advisory Executive Council. Most Hongkongers' rights to settle in Britain had already been removed by earlier legislation - the Commonwealth Immigrants Act in the 1960s. This meant the latest bill had little real additional impact on Hongkongers, according to MacLehose. However, he said of Executive and Legislative Council members and senior business figures: "They felt they had been betrayed and this new bill was a reminder. "I got this horrible feeling that although I had worked with these people all my time in Hong Kong, I was in the boat and they were not. It was most unnerving." MacLehose also said the legislation that had removed those rights had "at its heart the political horror of British political fear of large-scale Asian immigration". MacLehose said that before the Nationality Bill was discussed in the Executive Council, he did not have any sense of the resentment that the removal of right of abode had caused. "[Hong Kong people's] right of entry and abode had been removed in the Commonwealth Immigrants Act a long time before and, because it had been a long time, I personally hadn't given their subsequent feelings any thought, and it wasn't a subject that was mentioned to me," the governor said in the interviews.

Two Hong Kong students studying in the United States were killed and another was injured in a car crash last week. Ricky Fok Ka-hei, 21, who was attending Ohio State University (OSU), was pronounced dead at the scene of the accident in Clinton Township, New Jersey, on Monday. A second OSU student from Hong Kong involved in the accident, Jeffrey Au Yeung Ho-kai, 20, died from his injuries the next day. The 19-year-old driver, Tam Ho-wo, who was also from the city, was released from the hospital the day after the accident. A 20-year-old woman from Malaysia and a 19-year-old mainland woman, also passengers in the car, were injured. Police suspect fatigue as the cause of the crash. Investigators believe the driver fell asleep around 4pm at the wheel on Interstate 78, where the 2012 Chevrolet Equinox was found crashed into a clump of trees near the Pennsylvania border. The students were travelling back to university in Ohio after celebrating New Year's Eve in New York. Hong Kong's Immigration Department contacted the families of the two Hong Kong residents involved. "With the assistance of the commissioner of the Ministry of Foreign Affairs, the consulate general of the People's Republic of China in New York has also been informed and will take follow-up action," a government spokeswoman said.

Latest Hong Kong Guide on sale - The Hong Kong Guide 2012 edition, produced by the Lands Department's Survey & Mapping Office of the Hong Kong government, is on sale on Saturday. The new edition features the 18 districts of Hong Kong, providing useful geographic information as well as the latest District Council constituency boundaries and photographs of selected historic buildings. The single-volume publication contains 432 pages of quality maps and valuable information, including indexes of "streets," "places and villages," "estates and buildings," "schools," "public services," "leisure and cultural facilities" and comprehensive details about public transportation. The Guide also contains aerial photographs of the countryside and Hong Kong's spectacular shorelines. The Hong Kong Guide 2012 edition is on sale at all Survey & Mapping Office outlets, local bookstores and the Online Government Bookstore, with 100 HK dollars (US$13) . It can be purchased at the following location 

Capsule beds land in Hong Kong - Eric Wong, managing director of a capsule bed manufacturer, poses in a modified capsule bed inside a showroom in Hong Kong Jan 7, 2012. The beds, which are modified for the Hong Kong market, have adjustable ceilings, a larger air conditioner and a TV. They are aimed at university students and budget travellers from Chinese mainland visiting Hong Kong and will cost $450 a month or $30 a night, according to the manufacturer.

 China*:  Jan 11 2012 Share

Beijing hopes to capture the attention of TV audiences in New York with a news and entertainment channel aimed at boosting China's image abroad. The 24-hour free-to-air digital channel, named "Today China", will be beamed into New York homes by the first quarter of this year, according to the China Internet Information Centre. Yan Xinxia, a director at the centre, which falls under the control of the State Council, or mainland cabinet, said: "Our role is to propagate information about China overseas." The programs will be aired on the channel in New York owned by the Hong Kong-listed company CMMB Vision Holdings, a developer of mobile television and interactive multimedia businesses based on the China Mobile (SEHK: 0941) Multimedia Broadcasting (CMMB) standard. The channel will feature China-related news and entertainment content in both English and Chinese with English subtitles, according to CMMB Vision's chairman, Charles Wong. The China Internet Information Centre and CMMB Vision will also team up to provide video programs for mobile-phone users in New York, as well as a "Today China" website to be available worldwide. The mobile video service, built on the CMMB platform, will enable users to view programs on compatible mobile telephones and portable multimedia devices. CMMB is China's standard for delivering data-intensive video and internet programs to mobile devices. The standard was developed by the State Administration of Radio, Film and Television, which regulates the mainland broadcasting industry. CMMB Vision has built a network in New York and plans to extend it into other parts of the US if the mobile video service proves a success. Wong said the new service could generate profits for the company this year. "The TV service is free but there will be commercial slots. I am sure Chinese enterprises eyeing the overseas market will have an interest in advertising on our platform," Wong said. The company was already in discussion with some advertisers in Hong Kong, he said. Operating costs for the new channel will be low, as programs will be provided by the China Internet Information Centre, Wong said.

China has a patchy record when it comes to clamping down on bribes offered by its firms that are venturing abroad, say observers, and it remains to be seen if stricter laws will be enforced by corporate watchdogs. Tham Yuet Ming, a Hong Kong-based partner at DLA Piper, a law firm in the United States, said: "China has not shown consistency in the enforcement of its laws, so it is difficult to tell if there will be consistency in the enforcement of its amended anti-bribery legislation." Since May last year, Chinese firms operating abroad have been subject to tightened anti-corruption provisions contained in amendments to Article 164 of China's Criminal Law. The provisions expanded the scope of China's existing anti-corruption laws by criminalising the offering and giving of bribes to foreign officials and officials in international public organisations. "In practice, it will be difficult to enforce Article 164," Tham said. "If the bribery happens abroad, there may be practical difficulties getting evidence and you need the co-operation of foreign governments or prosecutors." Tham said he doubted whether Article 164 would be enforced with the same rigour as the Foreign Corrupt Practices Act (FCPA) under which US firms operate, or the UK Bribery Act. "Is Article 164 going to be enforced at the same level as the FCPA? Probably not, but the key point is [that] this is a move in the right direction for the Chinese government and brings them in line with countries in the OECD," Tham said. While the principle underlying the amendments was that the Chinese anti-bribery law would be brought in line with international practice, corporate competitors are yet to be convinced. Beijing is aggressively encouraging Chinese firms to expand abroad as part of its "going out" strategy. So far, Chinese firms have invested more than US$300 billion in 178 countries. In 2010, China's overseas investments rose 21.7 per cent to US$68.8 billion. But the extent to which bribery was oiling the wheels of this outward- bound investment remains a matter of conjecture. Lizzie Parsons, a campaigner for Global Witness, a British non-governmental organisation, said: "It remains unclear whether the Chinese government is serious about prosecuting individuals and companies who have broken the law." Several instances of bribery have been reported and China ranked a lowly 75th out of 183 countries in Transparency International's corruption index last year. Given this patchy record, the tightening of the anti-corruption law was a step in the right direction, said Kent Kedl, China and North Asia managing director at Control Risks, an international risk consultancy. "It's good that the law has been passed. The law is important in itself because it sets some kind of a standard," Kedl said. "However, the law is only the first step. A lot more needs to happen." He said a concerted effort to raise awareness of the law among Chinese firms was needed. "In the minds of some Chinese companies, bribery is how business is done. They know of no other way." China's anti-corruption law would only become effective in practice if watchdogs were given expanded policing powers, said Tara O'Connor, managing director of Africa Risk Consulting.

The China Securities Regulatory Commission is slowly reforming the Shenzhen Stock Exchange. The mainland securities regulator will relinquish its authority to conduct preliminary reviews of refinancing applications from firms traded on the second-board market - a move aimed at streamlining controversial share placement procedures. The Shenzhen Stock Exchange will instead undertake first-round reviews of share placement applications, replacing the China Securities Regulatory Commission's department overseeing the ChiNext market, according to two Beijing-based people briefed by securities officials about the matter. The policy shift follows increasing suspicions that the CSRC's oversight of the pace of initial public offerings (IPOs) as well as top-up share placements had caused millions of investors to lose money in the past year. Analysts said that although this was only a small step taken by the regulator to reform the share offering mechanism, it heralded a drastic move by the CSRC under the newly-appointed chairman Guo Shuqing to make the system on a par with international practices. "Handing power to the Shenzhen exchange for the preliminary review is just to test the water," said Huatai Securities analyst Zhou Lin. "The regulator will definitely deepen the reform in the near future." It is widely expected that the CSRC also plans to relinquish its role in IPOs and that reforms will be extended to the main board. Neither the CSRC nor the Shenzhen exchange could be reached for comment on Friday. The CSRC's refinancing review committee will still, however, have a final say on share placement applications during official hearings. Share offerings that are approved by the regulator normally receive a warm response from institutional investors, such as mutual funds, who are also under the oversight of the CSRC. In addition, retail investors are encouraged by the official tick of approval. Aside from ensuring an effective control over the pace of IPOs and additional share offerings, the regulator also has a say in the size of the share sales as a way to stabilise the market. Last year, 70 per cent of IPO stocks traded below their offering prices, leaving millions of investors with losses. They questioned the ready approval given to many IPOs, saying the approvals misled investors. In 2011, 280 IPOs soaked up 270 billion yuan (HK$330 billion) from the Shanghai and Shenzhen bourses, helping the mainland to retain its title of the world's largest IPO market. The subsequent lacklustre performance of the shares resulted in growing calls from analysts and investors for changes to the offering system. In the overseas markets, regulators are only responsible for reviewing the listing applicants' quality, and let the market decide the volume, timing and pricing of the offerings. The CSRC has been urged to stand on the sidelines of the share offering process and to give up its control on timing and pricing of the fundraising activities entirely. Sources with knowledge of the regulator's thinking said that under the direction of chairman Guo, who took office in late October, the CSRC was now seriously considering further drastic moves to make the IPO mechanism totally market-driven.

China's civil aviation regulator said Sunday that it has given the green light for domestic airlines to add 14,000 flights to meet massive passenger flow during the 40-day peak spring travel season, which started Sunday. Passengers are expected to make 34.88 million more trips by air during the Spring Festival travel rush this year, up 7 percent from last year, Xia Xinghua, deputy director of the Civil Aviation Administration of China (CAAC), said in a press conference. Xia said airlines are currently running nearly 8,000 flights each day at a capacity that is able to carry 1 million passengers on a daily basis. The CAAC has specially approved the addition of 412 flights every week so Taiwan businesspeople in the mainland can reunite with their families during the holiday season, Xia said. The CAAC also vowed to improve flight punctuality during the period. Meanwhile, Xia said a coordination system between airlines, airports and aviation regulators has been set up to ensure the smooth and safe running of flights in case of freezing rain or heavy snow. The Spring Festival, or the Chinese Lunar New Year, falls on Jan. 23 this year.

The biggest challenge for an investor in Chinese real estate, says Harvest Capital Partners CEO Rong Ren, is the locality issue. Harvest Capital Partners, a real-estate fund set up by conglomerate China Resources Group, made a bold move two years ago. Although residential property prices in China continued to test new highs, the fund decided to exit the sector by selling its two-million-square-meter residential investment portfolio in the country—and start looking into China's retail space. Last May, Harvest Capital closed its first mega retail fund of US$500 million, one of the first funds based outside China to invest solely in the country's shopping malls. Mainland retail properties have since become a hot target for foreign funds and investors. Rong Ren, chief executive and managing director of Harvest Capital, which launched its first fund in 2006, spoke with Polly Hui about his management strategies and the challenges of investing in one of China's most sought-after sectors. The following interview has been edited. WSJ: Why was Harvest Capital so bullish on China's retail property sector at the time? Mr. Ren: Consumption in China was rising strongly in the past 10 years and it will continue to rise. At that point in time, China was perhaps the only country in the world where the cost of land for retail and commercial property development was substantially lower than the cost of land for residential development. Commercial land should be more expensive than residential land. We believed that it wouldn't last forever, that the gap would have to close at some point. We started looking at the retail property sector, and told ourselves that if the gap closed in a few years' time, our fund would record substantial returns. Without looking at the performance of the shopping malls, the value of the properties alone will appreciate by about 30% a year (internal rate of return). We thought that was an exciting finding. WSJ: Why did you decide to exit the residential-property sector in China and Hong Kong? Mr. Ren: From time to time, I would lock my investment team in a room and ask them what they would want to invest in if they were investing with their mum's money. We never rely on any external research reports or opinions. About two years ago, my investment team said the residential sector was too messy. They couldn't see through it. If one can't see through a market as an investment manager, it's time to get out. So we sold all our residential portfolio in one go. We also abandoned Hong Kong around the same time because we thought the sector was too risky. WSJ: What is the greatest challenge for a China real-estate fund manager? Mr. Ren: The single biggest challenge we have been facing is the locality issue. Consumers in different districts or cities in China behave differently, and there's no rationale behind it. So, before we invest into any property or do the development plan—be it residential, commercial, or retail—we spend a lot of time trying to understand the locality, to find out the age groups that hang out there. And it's all done by ourselves—we walk around the street, eat at the local restaurants and take public transport. WSJ: Beijing's policy toward the property sector is shifting. How does Harvest Capital cope with the continued changes? Mr. Ren: I think many people have focused too much on the policy. Policy can never change the fundamental market forces, i.e. the demand and supply. China can't go back to the days of a centrally planned economy. Today, policy can only add volatility to the market. It will never fundamentally change the market. What the China property story is about is the structural undersupply of land. China needs to keep large plots of land for agricultural purposes because it has lower efficiency in the agricultural sector compared to anywhere else in the world. These plots can't be turned into commercial land as there wouldn't be enough food for the people. In China, two phenomena will last forever, or at least for my professional career: One, land supply will continue to be limited; two, demand for land will be unlimited as affordability continues to improve. WSJ: Why did China Resources Group set up Harvest Capital, and do they have any joint investments? Mr Ren: Back in 2005, China Resources Group just wanted to test the private-equities sector, with Harvest Capital as a trial case. I don't think they had a very clear picture at that point in time as to how the sector would grow. From the start, I told China Resources that if it wanted to grow the P.E. business, Harvest Capital needed to operate independently. So, we never co-work or co-invest with them, and we never buy any deal from their balance sheet. China Resources' role as our sponsor is very clear. WSJ: How has your investment-banking background helped you in your current role? Mr. Ren: I learned one thing from my 14-year investment-banking career: you have to be risk-averse. My job back then was in the debt-capital market. It's about bonds, commercial papers, syndicated loans, etc. What I worried about was whether my clients could get their principal back. Anything above that was none of my business. Similarly, when I look at a property in China, I consider the risks before I think about profit. Profit can take care of itself. But risks can hurt you. Although we have gone though two financial crises, our funds' internal rates of return are always in excess of 20%. WSJ: Are you planning to raise any more funds? Mr Ren: We are going to raise another mega shopping-mall fund to invest in another 10 shopping malls. I want to create a fund that can last five years. I always look at five to seven years as the time horizon for the funds. We are also planning to raise an opportunist fund in China early next year.

Wang Qiong says China's first flight attendants faced an arduous role. In 1980, Wang Qiong was among the first generation of flight attendants in China after civil aviation in the country was separated from the air force. Today, having retired from the high-flying job last year, Wang, 51, oversees more than 500 attendants from China Southern Airlines' Shenzhen base. She talks about her 31 years spent in the cabin. Why did you choose to become one of the mainland's first flight attendants in the 1980s? My parents, who both worked as professors, desperately wanted me to receive a tertiary education and become a lecturer. But I failed the national college entrance exam twice between 1978 and 1979 as there were a huge number of university applicants after the exam was suspended for 10 years due to the Cultural Revolution. I became one of the mainland's first flight attendants during an airline recruiting effort in Wuhan in Hubei province in 1980. Before that, all cabin service was required to be provided by soldiers from the air force. The job paid very well, and the monthly salary then was 32 yuan after probation. After the flight, we were also offered free nutritious meals, which cost about seven yuan each. But I received a 28-yuan monthly reimbursement if I chose to eat at home. Earning 60 yuan a month made me feel like a rich woman - it was equal to the total monthly income of my parents. After working as an attendant for the Wuhan bureau of the Civil Aviation Administration for more than a decade, I transferred in 1991 to the Shenzhen base of China Southern Airlines, where I was until I retired last year. China's aviation regulations set the age limit for flight attendants at 50. Now I'm in charge of the cabin-services department at the airline's Shenzhen base. What were the criteria for being a flight attendant at that time? Did you face harsh competition? Rather than directly recruit flight attendants, airlines at that time notified communities, and sub-district officers screened applicants according to their appearance and physical condition before submitting a list of candidates to the employers. There was harsh competition, and only 10 out of several thousand applicants got the job. I felt dizzy and lay in bed for three days after the physical to determine our ability to withstand dizziness. I thought I had failed. Although the job of flight attendant was still a mysterious occupation at that time, and not many mainland people knew about it, my neighbours all thought it was a golden rice bowl after we explained it to them. What was the life of a flight attendant like three decades ago? We had a much more arduous job than today's flight attendants, without any supporting staff such as cleaners. We needed to prepare for the journey one day ahead of time, from cleaning the cabin to loading meals. We had to climb up crude and dangerous iron ladders while carrying heavy supplies, as only passengers could use the comfortable stairs. It was a tough job, especially in summer. Without air conditioners or electric fans, we felt like we were roasting inside the cabin because Wuhan is considered one of China's "Three Stoves" during the summer (the others are Chongqing and Nanjing). The flight aboard Russian-made aircraft was also arduous. We flew at a low altitude without air conditioners - we had to open small windows - and passengers were allowed to smoke. The cabin was freezing in the winter, and everyone was shivering all over, even while wearing wool sweaters. With crude radar systems and because we were flying at low altitude, aircraft often jolted terribly, and captains could never warn passengers prior to turbulence as they can today. The journey was also much longer than today, as Russian-made aircraft had small fuel tanks and needed a stopover to refill. For example, a two-hour journey today from Wuhan to Beijing would take four hours in the 1980s. Luckily, we needed to service just three or four flights a month, as there were only two aircraft. What kind of people could afford air travel three decades ago? Only senior party cadres could travel by air at that time. There were an average of 30 to 36 passengers on each flight, and all of them were on business trips. I still remember the first flight that departed from Shenzhen's airport in November 1991. It was 8.30am and the aircraft with 48 passengers was heading to Beijing. A lady on board told me that she was so happy with the new airport - before that she could only take flights from Guangzhou. She said: "I bought the ticket yesterday and boarded the aircraft today - so convenient." Is being a flight attendant still a top choice for today's young people? Yes, because airlines generally have high standards on flight attendants' appearance and character in order to deliver good cabin service. With a beautiful uniform, delicate make-up and a decent salary, the public regards it as a good job. But there are also difficulties beyond people's imagination, such as long working hours and limited time to spend with your family. Flight attendants today have a much larger workload than before, as airlines have increased the ratio of passengers to attendants to cut costs. Currently, our Shenzhen base has 500 flight attendants and more than 20 aircraft. China sets a retirement age of 50 for flight attendants. Do you think it should be extended? No, I believe flight attendants need time to enjoy life and spend it with their families, although senior attendants generally deliver more courteous service than young ones. Being a flight attendant in China is totally different from working for foreign airlines. They need to attend political training and go through many occupational tests that aren't required by foreign airlines. I think it was enough for me that I worked in the cabin for 31 years.

Women marry for money and houses, while men wed for passion and looks, according to a countrywide survey of single and divorced mainlanders. Almost 80 per cent of women interviewed said they would not consider a man who earned less than 4,000 yuan (HK$4,900) a month. Among them, 27 per cent set their benchmark at 10,000 yuan - that's more than twice the average income in Beijing, one of the wealthiest municipals on the mainland. The average monthly wage for a Beijing urban resident (not including migrant workers) was 4,201 yuan a month in 2010. In Shanghai, it was 3,896 yuan; in Guangzhou, it was 3,128 per month. The monthly income for rural residents, who account for more than half of the population, was far lower. A farmer in Gansu province earned an average of 444 yuan a month in the first half of 2011. A controversial interpretation of the marriage law last year - in which it was ruled that in a divorce, a property bought by one of the couple's parents would go to that child solely - has also had a big impact on the financial arrangements of newlyweds. More than 40 per cent of men buying a house with their own money said they did not want to have their future spouse's name on the ownership certificate. About the same proportion of women said they would ask to have their names on the certificate. Nearly 51,000 people in all 31 provinces, regions and municipalities responded to the survey, jointly conducted online last year by the Committee of Matchmaking Service Industries, the China Association of Social Workers and, one of the biggest Chinese dating websites. There were slightly more male respondents than females. The education of those polled ranged from high-school matriculation to doctoral level. Around two-thirds had never been married, 30 per cent were divorcees, the rest were widowed. Compared to a similar survey in 2010, women's expectations of men's earning power has risen significantly. The proportion of women who wanted their partner to be earning 10,000 yuan a month rose by almost half, while the proportion who would be content with 2,000 yuan dropped by a third. More than 68 per cent of women would not marry a man who didn't own a home. Last year more than 70 per cent said a home was a prerequisite, and the drop may be a reflection of uncertainty about the mainland's real estate market, with many observers expecting big price falls. As for the men, what do they expect from their brides? Emotional involvement in the relationship ranked the highest, with almost 70 per cent ticking it as one of the three most important elements affecting their choice for a wife. More than 55 per cent also chose looks, making it the second most important criterion. (Only 22 per cent of the women cared much if their future husband was handsome or not.) The survey, published on the website of, also revealed that more than 57 per cent of women believed, or hoped, that marrying a rich husband would enable them to quit their jobs and live easily and happily for the rest of their lives. Compared to other age groups, women in their 20s had higher expectations of the prospective in-laws, preferring that they be the rich or influential. They also most wanted their partner to own a car. Nevertheless, they were the most willing to share the expenses of dating with their boyfriends. Single women felt less happy than single men, with about 20 per cent feeling miserable, almost a third higher than males. Having children is an important purpose of marriage for more than a quarter of the men, but only 16 per cent of women considered child-bearing a duty.

Hainan surfing festival attracts competitors all over the world - Brandon Jackson of South Africa competes during the International Surfing Association China Cup in Wanning, south China's Hainan Province, on Jan. 8, 2012. The three-day event attracts 48 surfers from eight top-ranked countries all over the world.


Members of a railway policewoman security squad head for a high-speed train at Wuhan Railway Station in Wuhan, capital of central China's Hubei Province, Jan. 8, 2012. Made up of eight policewomen at an average age of 26, the squad is the first of its kind to undertake on-the-train security duties along the Wuhan-Guangzhou High-Speed Railway. Starting from Sunday, China's transport system, including its high-speed railway, entered a 40-day period of intensive passenger flow around the time of the Spring Festival. Every member on the policewoman squad will go through a 60,000-kilometer railway journey during the Spring Festival travel rush. Li Na (C), a member of a railway policewoman security squad, checks passengers' luggage on a high-speed train at Wuhan Railway Station in Wuhan, capital of central China's Hubei Province, Jan. 8, 2012. Made up of eight policewomen at an average age of 26, the squad is the first of its kind to undertake on-the-train security duties along the Wuhan-Guangzhou High-Speed Railway. Starting from Sunday, China's transport system, including its high-speed railway, entered a 40-day period of intensive passenger flow around the time of the Spring Festival. Every member on the policewoman squad will go through a 60,000-kilometer railway journey during the Spring Festival travel rush. 

Beijing municipal authorities said Sunday that real estate control measures will be continued to bring housing prices to reasonable levels. The municipal housing and urban-rural development committee made the remarks responding to local media reports Saturday that Beijing authorities would soon allow home purchases by non-Beijing registered families who have been paying social security or income tax for three straight years, easing from current five straight years. Beijing will continue its regulatory measures on the real estate sector, which aim to bring the housing prices to reasonable levels, said the committee in a statement via its official microblog.

China will strengthen diplomatic efforts in Asia in 2012 and enhance coordination with Asian countries, Assistant Foreign Minister Liu Zhenmin said here on Sunday. In an exclusive interview with Xinhua, Liu said the regional situation will continue to undergo profound changes in 2012, posing challenges for China's diplomatic work. To properly handle differences, China will enhance political trust and expand common interests with countries in the region, in a bid to create a favorable environment for China's economic growth and contribute to peace in both Asia and the world. There will be important meetings between Chinese leaders and their counterparts from other Asian countries in 2012, including the Seoul Nuclear Summit, the BRICS Summit in India, the Asia-Europe Meeting in Laos, and the East Asia Summit in Cambodia, Liu said. "We will take the opportunities of high-level visits, strategic dialogues and exchange mechanisms at various levels to enhance strategic coordination and mutual understanding with Asian countries," he said. China will continue to play a constructive role in resolving hot regional issues, and will properly settle existing differences with neighboring countries through dialogues, Liu said. The country adheres to an open policy of mutual benefit, he said, adding that China will speed up the building of an interconnected infrastructure network, boost regional financial cooperation, encourage Chinese enterprises to invest in neighboring countries, and beef up the construction of free-trade areas with Asian nations and overseas economic cooperation zones. Meanwhile, China will also strengthen cultural exchanges with Asian countries, including celebratory activities to mark the 40th anniversary of the normalization of China-Japan relations, the 40th anniversary of China-Maldives diplomatic ties, the 20th anniversary of China-ROK diplomatic relations, and the 10th anniversary of China-East Timor diplomatic ties, according to Liu. China plans to set up more Chinese culture centers and Confucius Institutes in Asian countries, to cement educational and cultural exchanges and cooperation with neighboring countries, he added.

Hong Kong*:  Jan 10 2012 Share

Double yellow lines are no deterrent to drivers adopting creative parking in Pedder Street. Transport chiefs say they have no plans to introduce new measures to solve the traffic problems in Central, despite suggestions from police that using their officers to monitor parking problems is a waste of resources. A crackdown on illegal parking in Central last month involving more than 400 officers saw a rise in the issuance of parking tickets. But a police source said this would not solve the problem in the long term. On one day last month police also issued 302 tickets in Kowloon East for illegal parking and other parking offences. The source believed there were better ways of tackling the issue that would leave officers free to deal with more urgent concerns. "The erection of parking meters in Central would greatly help and make certain parking legal, which would take the pressure off," the source said. "The government could employ more traffic wardens to cover these particular areas. This job could even be delegated to the private sector and have certain companies enforcing these laws instead of traffic wardens. This happens a lot in some British cities." These alternatives were dismissed by the Transport Department, which maintained that the existing policy was the best way to move forward. A department spokesman said that since traffic was generally busy in Central and many buildings did not have internal loading or unloading facilities, parking meters would "affect traffic flow and greatly reduce the scarce spaces for the legitimate roadside loading/unloading activities, in particular those being used by public transport". "According to current policy, parking for all types of vehicle should preferably be provided off-street to optimise the use of limited road spaces and traffic circulation," the spokesman said. "Meanwhile, there are ample off-street parking spaces in Central." It was also confirmed there were no plans for police to outsource parking enforcement, which will remain a core duty of traffic wardens. Police will still have their hands full as the parking crackdown continues. They identified 18 illegal-parking black spots in Central, including Ice House Street, Glenealy, Arbuthnot Road, Queen's Road Central, Wyndham Street, Pedder Street, Duddell Street and Connaught Road. Central. A police spokesman said the crackdown on illegal parking in Central district was the culmination of publicity, education and enforcement activities.

The Hong Kong police force is to spend HK$2 million to upgrade and expand its anti-terrorist capabilities ahead of the inauguration of a new chief executive and the 15th anniversary of the handover. While the city's terrorist-attack risk level remains "moderate", the force's key points and search division - which works to make potential terrorist targets safe - is to buy three new detectors and radars to detect chemicals and explosives. A spokesman for the 28,000-strong police force said that purchases were made from time to time to replace equipment or enhance the unit's overall operational capability. "All of these procurements are regular activities of the division to make sure that the unit is functioning effectively," he said. The unit recently bought two handheld detectors of explosives and chemicals, which use Raman spectroscopy and Fourier transform-infrared spectroscopy to analyse substances they suspect could be explosives. Each detector cost about HK$500,000 and is capable of identifying 5,000 chemicals in seconds. The unit, which with the operations division and the counter-terrorism and internal security division form part of the force's operations bureau, is also planning to spend about HK$1 million on a ground-penetrating radar to replace its existing one, which has been in use since 1997. The radar is used to detect underground hollows and buried or concealed objects. Before important events vulnerable to attack, such as dignitaries' visits, the 450-strong key points and search division carries out venue searches and security screening at entrances to venues. It also provides security advice to organisers. The unit is also to hire 40 officers of the rank of constable to inspector and conduct a series of refresher training courses for existing unit members, the spokesman said. Meanwhile, the unit's three-week training course has been extended to four months, with an 18- to 24-month workplace attachment. The course has been revised to place more stress on knowledge and principles behind crime fighting rather than simply practical, on-the-job tasks. The course was the first run by a government department to be recognised by the Education Bureau's qualifications framework, and is equivalent to a diploma course at other educational institutions. The unit is seeking to co-operate with universities for credit exemptions for graduates seeking places on security-related programs.

Some of the 12 limited-edition, jewel-encrusted sculptures of Salvador Dali images to be offered for sale at the Opera Gallery. Some of surrealist master Salvador Dali's most famous images have been turned into pint-sized sculptures featuring precious jewels in a bid to attract cashed-up art collectors from the mainland. Dali's image of a melting clock, which first appeared in his 1931 work The Persistence of Memory, is one of 12 limited-edition sculptures at an exhibition to open on Thursday at the Opera Gallery in Central. Other works by the famous Spaniard that have been turned into jewelled displays include Alice in Wonderland and the Surrealist Piano, with prices for the sculptures, which range in size from 8cm to 15cm, starting at HK$2 million and reaching HK$4 million. "As China gradually becomes a dominant player in the art world, top Chinese collectors are targeting European and American masterpieces to add to their growing and versatile collection," gallery director Shirley Yablonsky said. She said the show combined two things many mainland art collectors were attracted to: a top-name European artist and valuable jewels. "We found Dali to be among the most popular Western masters collected by locals and there is a growing interest from Chinese collectors," Yablonsky said. "By collecting top names, they are slowly becoming a part of an elite group of world collectors." Since 2004, the gallery has regularly shown works from Dali. In 2007 it organised the Masterpieces and Beyond exhibition, which featured nine bronze sculptures created by Dali in the late 1970s and early 1980s, including the one-tonne Space Venus, which was installed at Exchange Square. Yablonsky said Dali's works were among the most copied in China, reflecting the demand for his works. While mainland collectors were mainly still seeking works from European masters and high-profile names such as Andy Warhol, Bernard Buffet and Marc Chagall as well as regional masters like Chu The-chun and Zao Wou-ki, Yablonsky said a new trend was also emerging. "As they start getting more and more exposure to the art world, many collectors develop an eclectic taste and we see growing demand for trends like street art and graffiti artists like Mr Brainwash and Ron English gaining popularity," she said. At Christie's most recent autumn auction in Hong Kong, almost 90 per cent of buyers that contributed to the final total sales figure of HK$2.85 billion were from Asia, mainly from the mainland, Hong Kong, Macau and Taiwan. Western art dealers are also turning to Asia to counter a slump in the European and US market by bringing their wares to Hong Kong, such as last September's Fine Art Asia fair.

Fishermen say the government is humiliating them, first with a trawl net ban and now reclamation plans. A representative of Hong Kong's fishing industry yesterday vented his anger at government plans for land reclamation, saying they ignored the possible damage to fishermen's livelihoods. "Each bit of the sea that is filled is a dent in our rice bowl, and the government thinks they can just put us out of work and pay us off," said Keung Siu-fai, secretary of the Hong Kong & Kowloon Floating Fishermen's Welfare Promotion Association. "A fisherman cannot find a job on land - we don't have the skills for it." Keung was also referring to the ban on trawling that went into effect on December 31, which cost the government HK$1.72 billion to compensate those boats that used trawl nets. He was speaking at a forum of almost 100 officials, engineers and environmentalists discussing the 25 sites suggested by the Development Bureau as suitable for land reclamation. The land will most likely be used for building homes for the future population and to create more space for landfills and utilities. The government estimates Hong Kong's population will grow by 25 per cent from 7 million to 8.9 million by 2039. However, it has overestimated population growth in the past, and some analysis suggests the projection could be too high by two million. "The government has demonised fishermen as damaging the environment," Keung said. "But at the same time, we have the government proposing 25 sites for land reclamation. Let's have a professional compare whether trawling or land reclamation will do more damage." He said there were 3,000 fishermen in Hong Kong. "We should pay respect to the ancestors of this city which started off as a fishing village, but look at how the government is humiliating us." He said the proposed reclamation site off North Lamma would wreak the most damage to the fishing industry. WWF conservation director Dr Andy Cornish, who attended the forum, agreed the government should make sustaining the fishing industry a priority, but that there seemed to be a mismatch in objectives. "You have one side of the government that wants to protect the fishing industry, and one side that is taking their livelihood away and then trying to pay them off." A common complaint raised in the discussion over suitable sites was that Hong Kong lacked strategic goals for 2039. "In the past 30 years, the government has never predicted the census correctly. So we need to look at what kind of city we want to be by 2039," said urban designer Roger Chan Chun-kwong. Chan pointed to Singapore as an example of a city that had successfully incorporated land reclamation as part of its long-term goal. Cornish said the WWF did not object to reclamation outright and accepted that development would have an impact on the environment. But the government should spell out its goals, so conservationists could better plan what to save and how. "We do not make decisions on how to protect the environment in a vacuum," he said. Environmentalists at the forum were most concerned about sites on North Lamma, Peng Chau to the west and ones that would require claiming part of Po Toi Island, to the south. Development Secretary Carrie Lam Cheng Yuet-ngor denied the government had exaggerated the projected population in 2039 in order to garner favour for land reclamation to build housing. Roy Tam Hoi-pong, president of Green Sense and who was at the forum, said he was not completely opposed to land reclamation, but he would only consider pledging his support if the government promised the land would be for public housing or home ownership scheme flats.

The resignation of KPMG as auditor of China Forestry Holdings is a worrying sign for the Hong Kong-listed firm, analysts say. "Clearly, there are issues that are troubling the auditor. It suggests the auditor is not receiving all the information it needs, and this is a bad sign for everybody," said Christopher Howe, managing director of Anglo-Chinese Corporate Finance, a Hong Kong corporate advisory firm. The Big Four accounting firm resigned as auditor of the mainland forestry company on Thursday, according to China Forestry's announcement. KPMG cast doubt on China Forestry's 2010 financial report, citing irregularities it found. "In response to the irregularities identified, we requested the company extend the investigation to identify all irregularities that may have occurred and all management involved in the irregularities, trace where the company spent proceeds from the initial public offering and reconcile details of plantation assets. We are still awaiting the results," said KPMG's letter to China Forestry. Immediately after KPMG found irregularities in January last year, China Forestry's board of directors set up an independent committee to investigate the matter, according to a China Forestry spokeswoman. "The company will make a public announcement on the findings of the independent committee when the investigation report is completed. China Forestry also implemented various measures to reinforce internal control in bank accounts, logging permits, forest ownership certificates, cash transactions and purchase of wood logs," she said. KPMG's inability to obtain information on the investigations is very disturbing, said a lawyer who declined to be named. "It suggests there is no co-operation between the auditor and the company. If they are not getting the information, they believe there is obstruction." "For auditors to resign, they don't take these things lightly." It is unusual for an auditor to issue such a strongly worded letter to a company, said Raymond So Wai-man, dean of the business school of Hang Seng Management College. "If the auditor states things so bluntly, it is trying to protect itself by saying the company will not provide information, so [it] can escape legal liability." In February last year, China Forestry's former chief executive Li Han Chun was detained on the mainland by Chinese police for allegedly embezzling 30 million yuan. In April last year, the company admitted some of its accounts were falsified. China Forestry's shares have been suspended since January 26 last year.

Hang Lung head urges care in plan on flat sales - Ban on property buying in HK by mainlanders is not good, says Leung supporter Ronnie Chan - The suggestion by chief executive hopeful Leung Chun-ying to sell new flats only to Hong Kong residents has raised a few eyebrows - including those of one supporter, Hang Lung Properties (SEHK: 0101) chairman Ronnie Chan Chichung. As part of his land policy to keep property prices at reasonable levels, Leung floated the scheme on Thursday. To test the idea, he would pick a site where a development targeting the middle class would be built. A clause in the lease during land sales would require that the flats be sold only to locals. Speaking at a Better Hong Kong Foundation event yesterday - where he serves as executive committee chairman - Chan said the matter should be handled with care. "Hong Kong is a free economy. The proposal should be considered carefully," he said. While there are questions about how Leung would define "middle class" during the process of land selection, Chan said: "The problem is not an operational one. It's more on principles." However, he did not completely reject the pilot scheme. "A blanket ban against mainlanders buying properties [in Hong Kong] is not good. But we can look into schemes of a smaller scale." Chan said the European debt crisis may put pressure on the city's office rents to fall if foreign companies halt their expansion plans. As for the mainland market, November prices for new private flats in 49 mainland cities fell compared with October's prices, according to the National Bureau of Statistics. Chan said curbs on lending by banks to developers were a drag on prices. However, prospects for local shopping centres and high-end malls on the mainland were positive. Queensway Plaza, Peak Galleria and Fashion Walk in Hong Kong are owned by Hang Lung. The developer also runs Plaza 66 and Grand Gateway 66 in Shanghai. Buying land on the mainland is on the agenda, but there are no plans to go shopping in Hong Kong yet. "People won't be happy if we start buying land again ... when we last did so in 2000, it was during the darkest days for the economy," he said. Hang Lung is holding some flats at The Harbourside in West Kowloon and Aqua Marine in Sham Shui Po and is taking a "wait and see" attitude on their sale, as the developer has no debt to service.

In perhaps a first in Hong Kong legal history, a drug smuggler who had an assault conviction overturned by the Court of Final Appeal using forged documents was convicted yesterday of perverting the course of public justice. Brian Alfred Hall, who is believed to be Nigerian, was convicted by Judge Eddie Yip Chor-man in the District Court of three charges of perverting the course of public justice and one charge of using false instruments, to which he had pleaded not guilty. Hall was labelled a "vexatious litigant" in 2008 due to his penchant for taking legal action from behind bars, where he is serving time for trafficking cocaine. Other than the Court of Final Appeal case, he attempted to use fake documents in two magistracy cases. Hall will be sentenced to a maximum of seven years next Thursday. The case stemmed from allegations that Hall punched a prison officer, Ho Kwok-keung, three times in the chest when he tried to take away his newspaper. Two alleged witness statements by prison officers presented later in the Court of Final Appeal claimed Hall had splashed water and thrown a chair at Ho instead. The difference between the two accounts undermined Ho's credibility and the conviction was quashed. A legal scholar questioned why no red flags were raised by the Department of Justice when he introduced fresh evidence into his 2008 Court of Final Appeal hearing. The case could become an embarrassment for both the justice department and Hong Kong's highest court. "The Department of Justice will have to carry the bulk of the responsibility," said University of Hong Kong legal scholar Simon Young. The Department of Justice was sure to face questions as to why it did not carefully inspect the evidence, he said. Correctional Services Department officials had raised the alarm over the documents and the police were investigating the claims months before the Court of Final Appeal hearing. The Department of Justice had also been informed about the documents before the case concluded. There were 15 fake documents in total, including medical reports and witness statements, among them a document allegedly signed by a former assistant commissioner of the Correctional Services Department, Chan Kong-sang. Director of Public Prosecutions Kevin Zervos said: "Once the appeal process is complete, we'll be making an application to go back to the Court of Final Appeal in light of the conviction." Not surprisingly, Hall vowed to appeal against the decision.

 China*:  Jan 10 2012 Share

Passengers buy train tickets in Chongqing yesterday. The railway ministry expects to carry 235 million passengers during the 40-day Lunar New Year period. With the Lunar New Year just two weeks away, transport hubs are bracing for a record number of travellers over the 40-day holiday period, which begins today. The central government expects more than 3.1 billion journeys to be made by bus, car, road or plane between now and February 16, a rise of 9.1 per cent from last year, according to the China News Service. That will make it the biggest movement of people in history, and will challenge the transport infrastructure, the management and safety of which can be problematic even on slow days. For example, about 30 million passengers are expected to travel through Guangzhou - a city with 12.8 million permanent residents - while more than eight million passengers will use Shanghai's airports. Though the government has been rapidly building high-speed railways, there are not enough trains or staff to deal with such a surge in demand. Traffic on the roads and railways and in the skies will be up to 10 times normal. Migrant labourers, many working in coastal cities but with family in rural villages, are the single largest group of rail travellers. In the past, they carried blankets, camped for days on public squares outside train stations to get a ticket home and won much public sympathy. Rail authorities are offering internet booking services this year to spare people from queuing in freezing weather, but migrant workers say this is next to useless as hardly any of them have access to computers. "In the past I could get a ticket with determination and sweat," one worker told China Central Television. "I wouldn't know what to do on the internet." Some who will be able to lay their hands on a keyboard will find most seats have been sold out. Air travellers must pay much more than usual for tickets, but suffer less from queues. Their biggest enemy will be snow. A modest snowfall in Beijing yesterday delayed flights and caused chaos at the capital's international airport.

World Bank chief economist Lin Yifu said Friday he was "quite optimistic" of sustained Chinese economic growth, and that he believed China has the potential to maintain an annual economic growth rate of around 8 percent for the next 20 years. "The reason why I think China has potential to maintain 8 percent growth rate for another 20 years is because of the 'advantage of backwardness,'" Lin said at a talk at the University of Chicago. He cited the phenomenon where developing countries use the technologies and business practices from more advanced economies efficiently that they actually grow faster than when those advanced economies had undertaken the innovation process themselves. According to Lin, also senior Vice President of World Bank, China's per capita income measured by purchasing power parity (PPP) was 21 percent of US per capita income in 2008, the most recent year for which data had been collected. Lin believed this statistic was an especially positive sign for continued and dynamic Chinese economic growth, as it was historically consistent with the development experiences of other East Asian countries that experienced 20 years of high percent growth after reaching the same 21 percent per capita income mark compared with the United States. When Japan's PPP per capita income reached 21 percent of US per capita income in 1951, the country experienced a 9.2 percent average annual growth rate until 1971. Likewise, South Korea experienced 20 years of 7.6 percent average annual economic growth until 1997, after reaching the 21 percent PPP per capita income of the US in 1977, according to Lin. Lin said he believed that the similar experiences of these countries could be used as a way to gauge Chinese growth, and that they all shared the advantage of operating in a modern world where they could utilize ideas from other developed economies and thus progress very quickly. Since China's economic reforms 32 years ago, the country has maintained an average 9.9 percent annual growth rate, though some doubted the sustainability of such growth. Lin said historical experience shows the trend has the potential to continue for the next two decades. Lin believed other developing countries could also tap into the "advantage of backwardness" like China and similarly achieve annual economic growth rates around 8 percent, if they developed their economy in line with their competitive advantages. According to the World Bank, Chinese per capita income increased from $182 in 1970 to $4,376 in 2010.

Workers pick tea leaves at a plantation in Nanping, Fujian province. The Wuyishan local government plans to build the city into a major production base, with an annual tea-processing output of 200 million yuan by 2015. Steeped in rich history, the misty and verdant mountains of Wuyi are set to sport an organic hue that not only promises to bring in the tourists, but also keep the cash registers ringing for tea growers. Tea has been one of the most important Chinese exports for several years now, with the Wuyi blends being the cup of choice among connoisseurs of Chinese tea. Black tea is one of the major components of the global trade and accounted for 66 percent of the 4.06 million tons of tea produced in 2010, according to the latest figures from the China Tea Marketing Association. Exports of black tea stood at 1.3 million tons in 2010 and accounted for nearly 75 percent of global tea exports. Nearly 44 percent, or 40,000 tons, of the black tea produced in China comes from Fujian, especially from Wuyi Mountain. In spite of these impressive figures, black tea exports from China currently account for less than 5 percent of the global total. Stiff competition from other growing nations in terms of pricing and stringent quality controls imposed by importing nations have made life difficult for many Chinese tea growers. However, things are set to look up again as consumers across the world become more health conscious and increasingly turn to products with more natural ingredients. Wuyishan, a county-level city in Nanping, northwest of Fujian province and named after Wuyi Mountain, is the cradle of most black teas in the world. The city has 592 companies and 958 family workshops engaged in tea production. Many of them have already turned to organic cultivation with an eye on the future. 

Chinese people start their preparations for the Spring Festival more than 20 days early. The 12th lunar month in Chinese is called La Yue (腊月 là yuè), so the eighth day of this lunar month is La Yue Chu Ba (腊月初八 là yùe chū bā), or Laba (腊八 là bā). The day is also known as the Laba Rice Porridge Festival. The Laba this year was Jan 1 - or New Year's Day. The three major customs on Laba are ancestor worship, eating Laba rice porridge (腊八粥 là bā zhōu) and making Laba garlic. Ancestor worship (祭祖 jì zǔ): At the end of the year, working people get more free time to prepare for the sacrifice to the ancestors. The reason the 12th lunar month is called La Yue has a lot to do with the custom of sacrifice. First, the worship of ancestors, called "腊" in Chinese, and the sacrifice for the gods, called "蜡 (là)", both frequently took place in the 12th month, which led to the traditional name of the month: La Yue (腊月). Second, winter is the slack season for farmers so they have time to find things to burn in the sacrifice. The radical of "腊" represents the sacrifice of meat to one's ancestors ("月" symbolizes meat). Laba rice porridge: There are several legends about the origin of porridge eating on Laba: Some claim it is of Buddhist origin; some say the porridge, made of red beans, can exorcize evil from children. Others say the porridge is in memory of a poor couple. The custom of porridge eating has been well known throughout history, from the royal court to common people. The most "authentic" porridge was made in northern China, especially Beiping (北平). The main ingredients of the Laba porridge are rice and sticky rice; people also add sugar, red dates, lotus seeds, walnuts, chestnuts, almonds, longans, hazelnuts, raisins, red beans, peanuts, water caltrops, roseleaf and other various materials to make the porridge special. Almost every part of China has its own local recipe for the Laba porridge. Eating hot porridge is great in cold winter, and the grain and nuts are considered healthy winter fare. Laba garlic (腊八蒜 là bā suàn): It is an old Beijing custom to soak purple-peel garlic with vinegar and a little sugar. First, pare the old skin of the garlic, then put the vinegar and garlic into a jar and seal it for keeping until the eve of the Spring Festival. When the whole family gets together for the dumpling feast that evening, they take out the Laba garlic which will be crisp, with a vinegary flavor and a green color. Vinegar with the aroma of garlic is the best seasoning for dumplings. Stories are courtesy of The World of Chinese,

China won't refuse to make its currency increasingly convertible under the capital account, but the country needs a greater voice in defining "full convertibility" globally, said Zhou Xiaochuan, the governor of the People's Bank of China (PBOC). "Because the International Monetary Fund (IMF) currently doesn't have specific standards on convertibility under the capital account, the definition of 'full convertibility' is discussable," said Zhou in an article published on Friday in the latest issue of China Finance Magazine, which is run by the PBOC. Therefore, the standards should be more flexible and China should participate in formulating methods to measure a currency's convertibility under the IMF framework, he said. Earlier this week Zhou said that the yuan will be freely convertible soon. "Now, we are not too far away from our goal of convertibility," he was quoted as saying by The official Chinese timeframe for the realization of full convertibility of the yuan is prior to the end of 2015. Zhou added that currency convertibility doesn't mean giving up control of cross-border financial transactions, and said that it is reasonable to curb speculative capital flows when the international market registers unusual volatility. "Convertibility should be based on the necessary management of the country's foreign debt. Yuan convertibility doesn't mean that anyone can borrow money in the global market freely." In addition, China is not planning to develop any disputable financial derivatives products that may hurt the economy, and the country emphasizes that the free use of currency has a precondition that it must serve the "real economy", which produces goods and services, Zhou added. In 1996, China made the yuan convertible for trade settlement, but hasn't allowed transactions of local financial assets into foreign assets at market exchange rates, fearing that such a move would stoke real estate and equity bubbles. China will be able to liberalize the currency exchange rates in three years and full convertibility is a must if the country wishes to include the yuan in the IMF's Special Drawing Rights (SDR) currency basket as a reserve currency and float the yuan globally, said Huang Yiping, chief economist for emerging Asia at the investment banking division of Barclays Bank PLC, earlier at a forum. He added that liberalization of the capital account does not mean there will be no limit for capital flows, and that short-term capital flows could be controlled through use of the regulations governing Qualified Foreign Institutional Investors and Qualified Domestic Institutional Investors. "It is agreed that the renminbi is likely to become a candidate for inclusion in the SDR basket, but it needs to become more freely and widely used in international transactions," said John Lipsky, former acting managing director of the IMF. Meanwhile, market indications that the yuan's exchange rate had started to move in both directions, instead of merely appreciating, would make the authorities more willing to loosen the brakes on the capital account and let the market decide the exchange rate at its own pace, said Lu Zhengwei, chief economist at Industrial Bank Co Ltd.

Hong Kong*:  Jan 9 2012 Share

Property tycoon Cheng Yu-tung made the most gains on the latest Forbes rich list even though real estate developers have been hit hardest in the economic slowdown. The executive chairman of New World Development is the No4 richest person in Hong Kong following the listing of his firm's jewellery retail arm, Chow Tai Fook Jewellery, last month. The jeweller's share offering - the city's largest last year - raised HK$15.8 billion, and boosted Cheng's net worth by more than 60 per cent to US$15 billion. However, the city's 40 richest individuals - the top five being mainly property developers - saw their wealth decline 7.4 per cent to US$151 billion. The sharp fall of the mainland's property market was partly to blame, with home sales plunging about 70 per cent owing to Beijing's tough measures to curb the property boom and bank lending. That in turn sparked a price war among major developers, who were desperate to raise cash to sustain their business. In addition, the city's benchmark Hang Seng Index sank 21.4 per cent or 5,029 points last year to 18,434 on December 30, further buffeting the wealthy elite. Billionaire Li Ka-shing, head of Cheung Kong (SEHK: 0001), saw his wealth decline 8.3 per cent to US$22 billion. However, he remains Hong Kong's richest person. Developer Lee Shau-kee has supplanted the Kwok family, which owns Sun Hung Kai Properties (SEHK: 0016), as No2 on the rich list. That came despite a 25 per cent fall in the share price of Lee's flagship firm, Henderson Land Development (SEHK: 0012). Shares of SHKP - Hong Kong's largest real estate developer, which is heavily exposed to the mainland's property market - also dived 25 per cent, slashing the Kwok family's net worth by 24 per cent to US$15.4 billion last year. Uncertainties about the firm's top management and a family feud were resolved in September when a succession plan was put in place. Kwong Siu-hing, the firm's 81-year-old chairwoman and wife of the late founder, Kwok Tak-seng, stepped down last month. Her sons Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen were appointed as joint chairmen. In 2008, the brothers were embroiled in a feud with their eldest brother, Walter Kwok Ping-sheung, which led to his demotion to non-executive director. Macau casino magnate Stanley Ho Hung-sun is no longer on the rich list after resolving a dispute between his wives over his fortune by giving it away. His fourth wife, Angela Leong On-kei, made the list for the first time. Leong is No21 with a fortune of US$1.6 billion, behind Pansy Ho Chiu-king, the eldest child of Ho's second wife. Pansy Ho, the apparent heir to her father's empire, is among the top 12 richest individuals. Ho is worth US$3.3 billion after MGM China, where she is co-chair, was listed in Hong Kong in June. The Yang family of the Esquel Group, one of the world's largest shirt makers, is a new entrant. Last year, the firm's revenue surged to US$1.2 billion, from US$530 million in 2006. Marjorie Yang and Teresa Yang, daughters of the firm's late founder, Yang Yuan-loong, now manage the firm. The net worth needed to make this year's rich list fell to US$950 million, from US$1 billion last year.

Hong Kong's Bishop John Tong Hon has been named one of 22 new cardinals by Pope Benedict, highlighting the significance of the city in the Vatican's push to extend its influence in China. He will become the seventh Chinese cardinal in the history of the Catholic Church. Tong will also become the third cardinal from Hong Kong, after the late cardinal John Baptist Wu Cheng-chung, and Cardinal Joseph Zen Ze-kiun. A Catholic scholar believed Tong's appointment had no strong implications for Sino-Vatican relations. But many observers have attributed the seemingly improving relations to Tong, whose soft approach is thought to have led Beijing to change its attitude to the diocese. Beijing long regarded Zen - who retired as head of the diocese in 2009 - with suspicion because of his often harsh criticisms about the lack of religious freedom on the mainland and the lack of democratic progress in Hong Kong. Zen regularly criticised Beijing for its unilateral ordination of several mainland bishops without papal approval. In 2010, Tong said: "Perhaps Beijing feels the way I do things is less provocative for them. I have always told them about my views and what I disagreed with. I am not a yes-man. It's just that I won't make my criticisms through the newspapers." He used his 2010 Christmas message to criticise Beijing and urge the release of jailed dissidents, likening them to the shining star that led three wise men to the baby Jesus in the biblical nativity story. Last year he spoke up on the case of a two-year-old girl left to die after being struck by a truck in Guangzhou, saying it was "a warning call for us to get rid of our selfishness". Tong's appointment means the co-existence of two cardinals at the same time, a first in the city's history. Anthony Lam Sui-ki, senior researcher at the Holy Spirit Study Centre, which studies issues related to the Catholic Church in China, said: "Hong Kong is a desirable place. "With advantages in language, the cardinals can express the ideologies of the Catholic Church in accordance with Chinese culture. Although Hong Kong is a small city, its importance in Rome has always been significant." The 22 cardinals-elect will be formally appointed at a conference in Vatican City next month. Cardinals are tasked with finding a successor when the Pope dies, usually choosing one of their own. Seven of the new cardinals are Italian. The others are from India, Canada, the Czech Republic, the Netherlands, the US and Germany. Zen will turn 80 next Friday. With Tong receiving the red hat in February, he will take over the right to elect the next pope. The Hong Kong Catholic diocese is the largest Chinese diocese in the world, with more than 357,000 Chinese Catholics and more than 17,000 Catholics of other nationalities, mainly Filipino.

The shop in Tsim Sha Tsui where guards have been accused of preventing people from taking pictures of the exterior. Luxury fashion house Dolce & Gabbana appears to have backed down from its stance of banning people from taking photographs outside its Tsim Sha Tsui shop, but this has not stopped an online backlash against the brand and a planned protest tomorrow. This week, the online community was buzzing with reports that security guards at the Italian brand's flagship Canton Road store had stopped passersby from taking photographs of the shopfront. It was claimed that the guards said only mainlanders could take pictures of the shop, sparking online outrage and claims of discrimination. On Thursday, a Facebook campaign was launched to rally up to 10,000 people to go to the store, which is part of the Harbour City shopping complex, tomorrow afternoon between 3pm and 5pm to take photographs. As of yesterday, the page had attracted more than 7,300 supporters. Last night, Harbour City management published an online apology on its Facebook page, acknowledging the negative reaction to the ban. In the statement, the centre management said it had learnt from the incident and would be reminding its tenants that the footpath along Canton Road was a public area. The centre said it would step up training to improve the communications skills and reactions of frontline staff when dealing with the public. The Hong Kong office of D&G did not respond to questions last night. Yesterday, about half a dozen photographers outside the Canton Road store took photographs and video footage, while a lone security guard watched and did nothing. Dozens of pedestrians walking past the store during the busy lunchtime period stopped to take photographs of the shopfront and were overheard discussing the issue. The South China Morning Post (SEHK: 0583, announcements, news) also took photographs of the D&G shopfront in Central and those of several other big-name luxury brands, including Burberry and Prada, with little to no response from security guards. A guard at Dior did step outside to ask what the photographer was doing after five minutes but did not ask him to leave or to stop taking pictures. Huen Wong, former president of the Law Society of Hong Kong, said the public were allowed to take photographs of shopfronts for personal use. "I can't see anything inappropriate with that. On street level, it's difficult to say but I'm surprised that it's in breach of any proprietary rights," he said. "Taking photos is one thing, copying is another. The way the stores display their decor is some form of intellectual property, so if you copy that you're potentially in breach. "If I take a photo of the HSBC building, I don't think they will stop me. It's not like watching a movie and copying it, that's different." Huen said there were exceptions such as photography bans at immigration counters and this was covered under a bylaw.

The head of the Basic Law Institute has weighed in on the debate over mainland women giving birth in Hong Kong, saying it has never been the legislative intent of the Basic Law to grant the right of abode to everyone born in the city. Alan Hoo, who is also a delegate to the Chinese People's Political Consultative Conference, pointed to a consensus reached during talks held by the Sino-British Joint Liaison Group in 1993 that only those born in the city with a parent who is a Hong Kong resident could have right of abode. Hoo cites a booklet issued by the pre-handover immigration department in 1997 that states its understanding of the agreement of the then joint liaison group on the right of abode issue. The booklet, referring to Article 24 of the Basic Law, states a Chinese citizen born before or after the handover will be regarded as a Hong Kong permanent resident and have right of abode provided a parent was residing in Hong Kong at the time of birth. A similar interpretation was adopted in a statement made at a Legislative Council security panel meeting in April 1997 by the then director of immigration. Such an interpretation, of course, would have been made after the Basic Law was adopted in 1990. Hoo urged Beijing to seek consent from London to release the details of the diplomatic discussions the two sides had over the issue at the time. "The right way to address the [mainland mothers] issue is not to ban them from coming to Hong Kong, but to not grant their babies right of abode here," said Hoo. "The issue was discussed by the then joint liaison group and consensus reached," said Hoo. "There is no need to ask Beijing to interpret the Basic Law, nor is there any need to amend the Basic Law." City authorities are trying to cope with an influx of pregnant mainland mothers travelling here specifically to give birth, which would enable their children to become permanent residents with Hong Kong passports and entitle them to education and health-care benefits. Professor Benny Tai Yiu-ting, a constitutional law specialist at the University of Hong Kong, said Hoo's suggestion could give rise to more questions than answers on the issue. "Under the common law system, the court would usually interpret the law according to what is written in the law book, not why the law drafters had written it in a specific way," said Tai. "It can be extremely difficult to ascertain legislative intent. Even if you ask the law drafters, there are chances their interpretation now might be different from what they had [originally] interpreted." Ho Hei-wah, a human rights advocate at the Society for Community Organisation, also warned that Hoo's suggestion, if adopted, would set a dangerous precedent. "Anyone can dig out some old documents from somewhere and say it is the original intent of the law and Hong Kong's legal system will be thrown into confusion," Ho said. However, Hoo said Hong Kong could not afford any more delays in addressing the influx, which has been straining the city's resources. He also warned that government measures to turn away pregnant visitors at checkpoints on grounds they had no proper delivery bookings at local hospitals could easily face legal challenge. "What if a pregnant businesswoman wants to enter Hong Kong for a business meeting, and she has no plan to give birth in Hong Kong and thus she would not have made any booking at hospital?" Hoo said. "She may sue the government for compensation if she loses a business deal just because the Hong Kong government refuses her entry because she is pregnant." Chief Executive Donald Tsang Yam-kuen raised the issue with Premier Wen Jiabao during his visit to Beijing last month. The government has capped the number of maternity beds for non-local mothers in public and private hospitals at 34,400 this year, but there have been reports that some mainland agencies are helping pregnant women abuse the system and gain admission to the city's hospitals via emergency wards. Official figures show that, as of December, 1,656 non-local women had given birth in the emergency wards of public hospitals last year, almost triple the 500 or so such births in 2010. That's despite tightened surveillance at border controls, which saw 3,560 pregnant mainlanders being refused entry last year.

Employees at Hongkong and Shanghai Banking Corporation have been thrown into despair as the city's biggest lender prepares to slash about 1,000 jobs after the Lunar New Year, a key industry union said yesterday. The Hong Kong Banking Employees Association, the main union for local bank staff, said frontline HSBC workers engaged in retail operations are the most vulnerable to losing their jobs. But many other departments are also unlikely to escape the ax, it said. Likely for small departments under this scenario, according to association deputy chief executive Tam Kin-sun, is their combination as part of the bank's plan to restructure some of its operations. The inevitable result of such a move will be the firing of many middle managers. HSBC Asia Pacific chief executive Peter Wong Tung-shun announced in September that the bank would cut 3,000 local staff in the next three years, sparking a public outcry. The cost efficiency of the Hong Kong operation of HSBC Holdings (0005) is much higher than the group's average, according to its own reports. Since November, the bank has made 500 staff redundant in Hong Kong, Tam added. Combined with those cuts, HSBC will have met half its three-year target of shedding 3,000 employees within just a few months. A Hong Kong-based HSBC spokeswoman reiterated the bank's September announcement yesterday while refusing to comment further. Wong did not answer queries after being surrounded by reporters outside HSBC headquarters in Central yesterday. The association said it will poll HSBC employees in the coming week for suggestions on what they could offer the company to deter further layoffs. Then the association will use them in a planned meeting with Wong to urge him to stop the layoffs, using concessions such as freezes on pay rises as a trade-off. Hang Seng Bank (0011), an HSBC subsidiary, Standard Chartered Hong Kong and Bank of East Asia (0023) yesterday said they have no plans to cut staff. But the picture is very different overseas. The Royal Bank of Scotland - now 83 percent owned by the British government - is to lay off up to 10,000 investment bankers worldwide, the Financial Times reported yesterday. Paris-based BNP Paribas has slashed about 40 jobs in Hong Kong after announcing a 1,400-staff global redundancy plan in November, The Standard has learned.

 China*:  Jan 9 2012 Share

IPhones, iPads and MacBooks are no longer rarities on the mainland; they have become hi-tech toys for both children and adults. Unicom lures clients with a free Apple - Push to lure high-end consumers with an iPhone 4 is seen as a waste of time by one analyst, but another says they will snap up coveted phone - China Unicom (SEHK: 0762), the nation's second-largest wireless carrier, is aiming to lure high-end subscribers by offering customers an iPhone 4S if they sign a three-year contract costing 286 yuan (HK$348) a month. But Li Zhiwu, an analyst at Bocom (SEHK: 3328) International Securities, said he doubted the deal would boost customer numbers. "When the iPhone was first introduced to the mainland the market reaction was feverish," he said. "But since then we have had iPhone 3G and the iPhone 4. The iPhone 4S is just an ordinary device upgrade" that failed to distinguish itself from iPhone 4. "The main difference is Siri, the virtual personal-assistant that responds to voice commands. Basically I think the Chinese subscribers won't use that due to a language problem." The Unicom package includes a 32-gigabyte model with a three-year plan, while customer signing up for two years for a monthly fee of 386 yuan will get a 16-gigabyte model. China Unicom is the only mainland carrier offering the iPhone with a service contract. Yang Changlong, an industry analyst at Beijing's Bayes Consulting, expects the offer to be successful. "Yes, the device is not much different to the previous version," he said. "However, Chinese consumers prefer the new model and they have been waiting for a long time." Shares of Unicom fell 1.3 per cent yesterday, closing at HK$16.42. The benchmark Hang Seng Index dropped 1.17 per cent. China Mobile (SEHK: 0941) and China Telecom (SEHK: 0728), the other two major telecoms operators in the country, fell 1.5 per cent and 2.7 per cent in Hong Kong. The operators are hoping to woo high-end users who consume data services such as online games and videos on their phones. Users of high-speed third-generation (3G) networks in China more than doubled in the first 11 months of last year to 117 million. China Unicom had 36.5 million 3G subscribers as of November, 31 per cent of the nation's total. China Mobile, the world's biggest wireless network operator, had 48 million. "Unicom did well in attracting 3G users in the latter half of the year, driven by the successful launch of a series of smartphones that cost less than 1,000 yuan," Yang said. The operator had a target of adding 25 million 3G users last year. It had gained an extra 22.5 million by the end of November. "Without a doubt, Unicom has achieved the goal," Yang said. Unicom's 3G subsidy costs in the first half of last year jumped to 5.94 billion yuan from 1.62 million yuan in the same period in 2010. Li said the new iPhone4 package would not further burden the carrier as "it is just continued from that of iPhone 4". Separately, South Korea's Samsung Electronics, the world's top maker of memory chips and smartphones, reported a record quarterly profit of 5.2 trillion won (HK$34.73 billion) yesterday, aided by one-off gains and best-ever sales of high-end phones. On the same day, Taiwanese smartphone maker HTC reported a 25.5 per cent fall in net profit in the fourth quarter, lagging market expectations. The world's No 4 smartphone maker's unaudited net profit in the quarter was NT$11.02 billion (HK$2.9 billion), compared to NT$14.80 billion a year earlier. However, the firm's net profit for the full year was up 57 per cent to NT$62.05 billion. "HTC is competing with Apple face to face," Yang said. "When Apple launches a new model, consumers are more likely to choose iPhone."

Beijing is banning kindergartens from charging admission fees and additional charges for special interest classes in its latest bid to crack down on overcharging. A joint statement by the National Development and Reform Commission (NDRC), the Ministry of Education and the Ministry of Finance said kindergartens would be prohibited from collecting fees in the form of sponsorships, donations, building funds or other charges as a precondition for enrolment. They would also be forbidden from collecting extra fees for organising special interest groups, learning workshops, after-school training programmes or parenting classes. Kindergartens will be allowed to charge fees for education, child care and accommodation, but fees for services provided by others should be collected on a voluntary basis and publicised regularly. The foundation for kindergarten education on the mainland is still weak, an unidentified NDRC official was quoted as saying, and the public still felt strongly that it was difficult to get a child enrolled at a kindergarten and that they were expensive. The lack of kindergartens has become increasingly acute in cities following a baby boom in recent years, and the central government only began to address the problem seriously in 2010. In July of that year it unveiled a blueprint for education development over the following 10 years that listed improving the poor state of kindergarten teaching on the mainland as its top priority. Three billion yuan (HK$3.7 billion) in subsidies were provided for kindergartens in central and western regions and areas with ethnic minorities. "This plays an important role in regulating kindergarten fees and protecting the legitimate interests of both the students and the kindergartens," the NDRC official said. Chu Zhaohui, from the National Institute for Educational Research, said such bans would achieve little in making kindergartens more accessible because they did not go to the root of the problem. Kindergartens were only able to charge "donation fees" when places were in short supply or when they had better educational resources than competitors. With 70 per cent of educational resources, funding and good teachers going to model public kindergartens, they were well placed to charge more, Chu said. Tuition fees for such public kindergartens are usually cheap compared to private ones, but because they have better facilities, parents are willing to pay more to get their children enrolled in them. "The key is for the government to provide enough seats for children and eliminate the difference between heavily government-subsidised public kindergartens and the rest so that parents do not need to find the means to get their children into only a few kindergartens," Chu said.

US Treasury Secretary Timothy Geithner may have a tough job persuading China to support imposing further economic sanctions on Iran during his forthcoming visit to Beijing. Geithner will visit China from Tuesday to talk about sanctions on Iran and economic issues, according to the US Treasury Department and China's Foreign Ministry. He will meet Vice-Premier Wang Qishan on Tuesday and Premier Wen Jiabao the following day, the US Treasury Department said on Wednesday. He will then travel to Japan to meet Japanese Prime Minister Yoshihiko Noda and Finance Minister Jun Azumi. Seeking collaboration with the two Asian countries to reduce Iran's oil revenue and force it to abandon its suspected nuclear weapons programme would top Geithner's agenda, the department said. Geithner would "discuss our continued co-ordination with international partners in the region to increase pressure on the government of Iran, including financial measures targeting the central bank of Iran", the department said. The Foreign Ministry said Geithner would be in Beijing to discuss Sino-US economic relations and the global financial and economic situation, without mentioning sanctions on Iran. On Saturday last week, President Barack Obama signed into law new sanctions against financial institutions dealing with Iran's central bank, the main conduit for the country's oil revenues. In addition, European Union diplomats said on Wednesday that a preliminary agreement to ban imports of Iranian crude had been reached. Oil prices rose on the news. It would be a major handicap for the efforts of the United States and Europe if China, the biggest customer for Iran's oil, refused to take any action on the issue, said Shi Yinhong, an expert on Sino-US relations at Renmin University in Beijing. "As the situation in Iran gets grimmer, the US is turning more towards support from China on sanctions, whether military or economic," he said, "[but the] chances of China agreeing ... are slim." Over the years, China has sustained a stable political and trading relationship with Iran despite pressure from Western countries. On Wednesday the Foreign Ministry restated Beijing's opposition to the US-led push for unilateral sanctions on Iran. Iran has warned it could choke off international crude shipments through the Strait of Hormuz, a transit point for 20 per cent of the world's oil, if sanctions are imposed. Many market participants, however, say the chances of Iran following through with its threat are remote, and security analysts question whether it has the capability to shut the strait. During his trip to Asia, Geithner will also discuss policies to promote global economic growth and efforts to support a level playing field for global trade, the US Treasury Department said. Geithner's visit to Beijing might also cover now-familiar issues including the appreciation of the yuan and market access for US exports, Shi said.

Guangzhou is aiming for double-digit growth this year despite the global economic slowdown, according to the city's government work report released yesterday. Although Guangdong party secretary Wang Yang said earlier that Guangdong would not fight with other provinces over gross domestic product growth rankings, Guangzhou is targeting a growth rate of 11 per cent, considerably higher than the 8.5 per cent target for the province as a whole. By 2016, the city's GDP was expected to surpass two trillion yuan (HK$2.46 trillion) with an average annual growth rate of 11 per cent in the intervening years, acting Guangzhou Mayor Chen Jianhua told the Guangzhou Congress. The city expects foreign exports to grow 8.5 per cent this year. The city says it has seen GDP rise by double digits for each of the past two years, with an estimated increase of 11 per cent last year and 13 per cent the year before. The city also aims to better distribute development between different regions, encouraging more growth in the countryside. Chen said the city planned to invest 71 billion yuan on 100 key projects this year. As one of the city's three principal industries, vehicle manufacturing is slated to play a big role. The city plans to ramp up car-making capacity in its Huadu industrial district to one million vehicles and 960,000 engines. Similarly, it aims to increase the capacity at a Zengcheng city project to 300,000 vehicles. Chen promised numerous programmes and initiatives to improve the lives of city residents. Among them, he hopes to create jobs for 300,000 people and offer 60,000 vocational training certificates. He said the city would also attempt to contain consumer price rises at 4 per cent and build 45,000 subsidised flats. The government would raise low-income subsidies for villagers and urban residents by at least 10 per cent, and sponsor 100 shops citywide selling subsidised agricultural produce. The city plans to speed up construction of the transport network. The Guangzhou sections of the Guizhou to Guangzhou and Nanning to Guangzhou railways are expected to open to traffic this year. The city also hopes to quicken the pace of construction of the transport network between cities of the Pearl River Delta. Chen also promised to build 50 community cultural plazas - each bigger than 500 square metres - 126 basketball courts and five public swimming centres.

Hong Kong*:  Jan 8 2012 Share

China Minsheng Banking Corporation has received Hong Kong regulatory approval to set up a Hong Kong branch, the firm said in a statement to the Shanghai Stock Exchange on Friday. The firm’s chairman Dong Wenbiao told the China Securities Journal that the setting up of a Hong Kong branch, the firm’s first overseas, would mark a step in its international expansion. Late in December, the bank said it had received China central bank approval to issue of up to 50 billion yuan (US$7.9 billion) worth of special bonds, which will be used for loans to small firms.

Aluminum Corp of China (Chinalco), parent of listed Chalco (SEHK: 2600), plans to list its Peruvian copper mining project in Hong Kong, according to a report. The move may signal it will not inject its copper assets into Chalco as some investors hoped. BNP Paribas, China International Capital Corp (CICC) and Morgan Stanley will arrange the flotation to raise up to US$1 billion, Thomson Reuters' IFR Markets reported. Chinalco has also appointed CICC and UBS to spin off its construction and machinery division in Hong Kong to raise US$500 million, it added. Last October, IFR said the listing for the Peruvian assets might take place in this year's first half. A Chinalco spokesman could not be reached for comment. BNP and UBS declined to comment, while officials from the other banks did not respond to e-mailed enquiries. In mid-2008, Chinalco paid US$860 million for Peru Copper, which operates the Toromocho copper project. Chinalco plans to invest US$2.2 billion to bring the mine - which is 142 kilometres east of Lima in central Peru - to production by the end of next year, according to the company. Last August it was cleared to begin building crushing and grinding facilities at the mine, which has an estimated annual output capacity of 250,000 tonnes. The mine's estimated 12 million tonnes of copper reserves amounts to 19 per cent of China's domestic copper reserve, Xinhua said. China imports more than 60 per cent of its consumption of copper, which is used in power lines, construction and manufacturing. CLSA head of resources research Andrew Driscoll said while the market would be tough for new listings this year, relatively tight copper supply and a lack of listed copper mining firms in Asia meant investment interest in the Peruvian assets would be good. Chinalco, China's largest aluminium producer, has been diversifying into other metals after low profits and losses in its aluminium operation in recent years because of oversupply and depressed prices. In addition to Toromocho, it has bought a 49 per cent stake in Yunnan Copper Industry and has formed a joint venture with Australian mining giant Rio Tinto to explore for copper in China. Chinalco's decision to list the Peruvian copper assets separately means it will not be likely to inject its other copper assets into Chalco to avoid intra-group competition.

The One shopping centre in Tsim Sha Tsui. Chinese Estates will arrange tour groups from Guangdong during the Lunar New Year holiday. Chinese Estates (SEHK: 0127) expects annual rental income from the One in Tsim Sha Tsui and the Windsor House shopping arcade in Causeway Bay will increase 10 per cent this year as it benefits from a change of tenant mix and strong retail sales. The firm will hold exhibitions during the Lunar New Year season to attract shoppers. It expects visitors at the two shopping centres to reach 650,000 during the holiday from January 21 to 26 - a rise of 30 per cent from last year. Turnover is expected to climb 20 per cent to HK$55 million. If Chinese Estates' four other shopping centres are included in the above holiday forecast, the company expects the number of shoppers to rise 22 per cent to 1.2 million. Revenue is expected to jump 15 per cent. Chinese Estates will arrange visits to the One, Windsor House and Silvercord in Tsim Sha Tsui for 30 tour groups from Guangdong province during the holiday. Each visitor is expected to spend HK$3,000 to HK$6,000, which is expected to boost retail sales by about HK$6 million. Vice-chairman Lau Ming-wai said the outlook for the retail market was still positive, despite the economy being clouded by the European debt crisis. "We have seen international brands continue to expand in Hong Kong. Even if the growth in retail rents is narrower this year from a year ago, I don't think it will be substantial," Lau said. Separately, Sino Land's Tmt Plaza in Tuen Mun will spend HK$5 million on decorations and promotional activities at the shopping centre during the Lunar New Year. The developer expects to boost retail sales to more than HK$750 million this month, 10 per cent more than January last year. The shopping centre will arrange for 10 tour groups from Guangzhou and Shenzhen to visit during the holiday.

The coming Year of the Dragon will be busy with weddings, buoyed by fung shui predictions that the lunar year is a prime time to tie the knot, industry insiders say. And related businesses can expect to do a roaring trade on December 12, or 12/12/12. Juliana Wing, of the Hong Kong Gold Coast Hotel, said: "We organised nine weddings on October 10, 2010. To get a place on December 12, 2012, people started booking last year." The Year of the Dragon starts on January 23. According to the lunar calendar, it is a leap year - the 13th month is meant to synchronise the lunar calendar with the astronomical year. The Chinese define 24 "solar terms" across the 12 lunar months, but during a leap year, there will be an extra solar term. That is inspiring many to become "dragon couples". Ocean Park, which provides themed ceremonies and banquets, said it had received almost 200 wedding bookings, up from 127 a year ago. "Chinese fung shui says the additional solar term will help a family to prosper," Joseph Leung, the park's executive director of revenue, said. Wedding planners are cashing in as well. Lisa Ng of Joyful Wedding, which specialises in traditional wedding rituals, said it was unusual for people to wed in the first month of the lunar calendar, but 12 of her clients will do so this year. "One pair said they had been waiting for the Year of the Dragon," said Ng, who has been in the industry for a decade. She said more Westerners were opting for Chinese ceremonies. "A client dressed his whole family in traditional outfits, such as the mandarin gown." Young people, however, love historical concepts. "We organise Tang-style weddings in which people dress like Yang Guifei [the consort of a Tang dynasty emperor]," said Ng. Several auspicious fung shui dates in November and December are nearly fully booked, according to Erica Cheng of the Super Star restaurant group. Banquet prices have been raised to between HK$5,788 and HK$8,988 this year, from HK$4,980 to HK$7,880 last year.

Sushi-Zanmai president Kiyoshi Kimura (left) holds a knife after cutting off the head of the giant bluefin tuna his company bought in Tokyo. A Hong Kong sushi chain bowed out of a high-profile bluefin tuna auction in Japan yesterday, losing its four-year reign as the top bidder but stopping short of dropping the controversial delicacy from its menus. For the past four years, Taste of Japan - which owns the Itamae Sushi and Itacho Sushi restaurants in Hong Kong - has run promotions following its winning bid for "Japan One", the biggest bluefin tuna on sale at the first auction of the year at Tokyo's famed Tsukiji fish market. Last January, the company paid more than HK$3 million for a 342-kilogram bluefin tuna and sold it to customers at hugely reduced prices as a "thank you" gesture. Yesterday, the president of Japanese sushi chain Sushi-Zanmai, Kiyoshi Kimura, snapped up the biggest bluefin on offer for a record 56.49 million yen (HK$5.7 million). "I wanted to win the best tuna so Japanese customers, not overseas, can enjoy it," said Kimura of his 269-kilogram catch. While Taste of Japan in Hong Kong did not bid for the fish, its Japanese subsidiary did. Instead, Itamae Sushi Japan bought three smaller bluefin tuna for a total of HK$1.05 million, with the catch to remain in Japan for local consumption. A spokeswoman for Taste of Japan said the company decided not to bid this year so its Japanese affiliate could have a chance to win. She confirmed the chain still served bluefin tuna at its 35 restaurants in Hong Kong. WWF Hong Kong marine conservation officer Allen To welcomed Taste of Japan's decision to pull out of the auction yesterday but said this was not enough. "It is important for ... all restaurants to remove bluefin tuna from their menus," he said. The environmental group recently conducted a study to determine the type of bluefin that is served in Hong Kong and found that out of 22 samples, 12 were Atlantic bluefin. "This is a shocking result. Atlantic bluefin tuna, like pandas and tigers, are classified as endangered species on the International Union for Conservation of Nature list," To said. "This is the first time it has been scientifically proven to be found in Hong Kong and it means that customers may be unknowingly helping to wipe out a species in real trouble." Since 2009, WWF Hong Kong's campaign to save the bluefin has resulted in 24 restaurants in the city pledging not to serve it.

Tse Kwan-ho and Josie Ho star in The Liaisons, an Arts Festival theatre production that has faced difficulties arranging a rerun. Local performers need nurture, arts veterans say - Call for government to help home-grown groups, amid concerns about new West Kowloon hub - Arts veterans say lack of government support to take their efforts to a higher level is inhibiting the growth of local performance groups. Speaking amid concerns that a lack of home-grown talent could blight development of the West Kowloon arts hub, they say local arts groups should gradually shed their welfare status. But before that can happen, those set up with government help need support to go private and overcome such obstacles as big firms' reluctance to sponsor performing arts, and government reluctance to view the arts as an industry. "[Government funding] helps the growth of young arts groups, but we need to move forward and elevate [our arts scene] to a new level," veteran theatre director Frederic Mao Chun-fai said. Mao said there were a lot of home-grown productions but the city did not nurture these or promote them to become shows that could represent Hong Kong. He cited difficulties faced in arranging a rerun of his own show, The Liaisons, which toured Beijing, Shanghai and Shenzhen after opening in Hong Kong in 2010. First there was a venue problem, as government venues can be secured only for limited periods, meaning they cannot stage longer runs to recoup production costs. "But we can't sell tickets at expensive prices ... audiences are used to cheap tickets because most of them are funded by the government," he said. Government efforts to support the arts are channelled through the Home Affairs Bureau. But Maurice Lee Wai-man, a member of the bureau's advisory committee on arts development, said there should be more efforts involving other agencies such as the Commerce and Economic Development Bureau through CreateHK. "Drama is seen as arts and culture, not an industry, and thus the Home Affairs Bureau is the only mechanism supporting the arts. CreateHK only supports money-making projects," he said. Lee, a former vice-chairman of the Arts Development Council who has been supporting the rerun of The Liaisons, said companies did not want to put money in as they doubted the promotional effects. "So we had to find individuals affluent enough to support us. But as anyone can imagine, it's not easy." The initial production of The Liaisons, a new twist on the Cantonese opera classic The Legend of the Purple Hairpin, was backed by the Hong Kong Arts Festival, now in its 40th anniversary year. Executive director Tisa Ho said that with a HK$110 million annual budget, a third of it from the government, the festival had been investing in local productions for three years. "We hope to produce something in the festival that has the possibility of a life afterwards," said Ho. "But sponsorships are always difficult unless you have a long track record." The Liaisons will be staging a rerun of eight shows at the Academy for Performing Arts from today until January 14, except Monday.

The Court of Final Appeal on Friday ordered the Catholic Church to foot the bill for its failed legal challenge against reforms that take away the church’s absolute control over management of schools it runs. The order awarding costs against the church was the final blow at the end of an unsuccessful five-year legal challenge to Education Ordinance amendments that took effect in 2004. It leaves the church facing an unknown but substantial bill for fighting an issue on which it felt so strongly that former diocesan chief Cardinal Joseph Zen Ze-kiun once staged a three-day hunger strike in protest. The church, which runs 80 aided schools, was unhappy about the introduction of what it termed “outsiders” into its management committee, fearing that the “non-representatives” might not adopt the church’s educational and management approach and Catholic philosophy. It had sought costs to finance earlier hearings in the Court of First Instance and Court of Appeal, and a “reasonable percentage” of its costs before the Court of Final Appeal. But in its judgment on Friday, the top court said there were no special features in the case that would lead it to depart from the normal practice that the loser should pay the costs. The judges reaffirmed in the decision that “there was no suggestion that the 2004 amendments posed any threat to freedom of religion”. The church also failed in its argument that the Basic Law guaranteed religious bodies could continue to run schools after the 1997 handover in accordance with “previous practice”. “The court holds that the appellant’s asserted authority to appoint 100 per cent of a school’s management committee, as well as the school’s supervisor and principal according to its previous practice, involves no constitutional right protected by the Basic Law,” the judgment said. The amendment to the ordinance gave schools until July 1, 2009, to set up an incorporated management committee on which parents, alumni, teachers and independent candidates made up 40 per cent of members, with 60 per cent to be appointed by the sponsoring body, such as the Catholic Church. In the judgment against the church in October, Mr Justice Kemal Bokhary wrote: “The challenge fails because the challenged legislation leaves religious organisations free to nominate a majority of persons serving on the incorporated management committees of aided schools which they sponsor.” Bokhary said the challenged legislation made no direct attack on religious activities at schools. As long as religious organisations were free to nominate most of the members of its committees, then religious activities were acceptably safe from indirect attack and from erosion.

The Year of the Dragon is a big year for marriages and babies. So what do Hong Kong’s Dragon couples and Dragon babies need? Dragon dens, of course. That’s good news for Hong Kong’s property developers. It sure has been a rough ride for the likes of Sun Hung Kai Properties and Henderson Land Development. Property transactions fell to a five-year low in 2011, with the Hang Seng Property Index finishing the year down more than 20%. According to the latest Forbes Hong Kong rich list, real-estate developers saw their wealth decline last year. Li Ka-shing—still the richest in the territory—was 8% poorer than in 2010. Not only is it a Dragon year, but it’s also a leap year, according to the Chinese lunar calendar, with 13 months. The extra month is to synchronize the lunar year, which has 354 days, with the astronomical year, which has 365.25 days. The extra month makes it possible to have two “springs” in the year, which is auspicious. In Chinese, the word “spring” has connotations of fertility. According to Citigroup, more people tend to marry in these lucky years. Marriages rose 12% year-on-year in the auspicious years of 2001, 2004, 2006 and 2009, compared with 1% in the “normal” years. Home prices also went up more in the good years—14% on-year, compared to 2% in other years. With an estimated 60,000 couples in Hong Kong registered to get hitched this year, that should give a good shot in the arm to the city’s real-estate market, says Citi.

Business activity in Hong Kong contracted for the fifth straight month in December due to the global economic slowdown, though it still picked up from the prior month as new orders increased for the first time since July, HSBC Holdings PLC said Thursday. The HSBC Hong Kong Purchasing Managers' Index, a gauge of private business activity, rose slightly to 49.7 in December from 48.7 in November. A reading above 50 indicates expansion in the sector, while a reading below that level indicates contraction. The index has been below 50 since August. December's PMI signals that business activity continues to ease, albeit at a more moderate rate than before. The bright spot for December came from new orders, the index for which moved back above the 50 mark for the first time in five months to 50.4 from 49.0 November. The rise in new orders was due to aggressive sales promotions and new product launches, HSBC said. With manufacturing activity in China still shrinking—albeit at a slower pace than before—and the external economic outlook continuing to worsen, Hong Kong businesses ran down their back logs of work in December to minimize the impact of slower growth in new orders, the bank said. "Hong Kong's economy has come off the boil, but it's still simmering. Overall demand strengthened in December, helping to offset continued softness in Mainland manufacturing activity," Donna Kwok, Greater China economist at HSBC, said in a statement. "Headwinds from both the trade and financial channels will slow growth in early 2012, but provided Beijing's stimulus measures feed through, the city should strike a healthier balance between inflation and growth," Ms. Kwok added. The HSBC gauge is derived from indexes measuring changes in output, new orders, employment, suppliers' delivery times and stocks of goods purchased. HSBC surveys more than 300 companies in the city to compile the index.

 China*:  Jan 8 2012 Share

The war against fakes is gaining ground on the mainland as big stores stop selling counterfeit goods and more consumers demand the real stuff. The mainland's reputation as the home of fake goods may be coming to an end as increasingly savvy consumers demand the real thing. Licensing agents for global brands said the threat from fake goods had declined in recent years amid surging demand for genuine goods and co-operation between mainland and overseas merchandisers. Agents such as Hasbro and Promotional Partners Worldwide (PPW), which help put images of popular film and cartoon characters on mugs, apparels and stationery, said fake goods had not thwarted their advance into the mainland retail market. Big department stores and e-commerce platforms had become helpful partners in pulling phony products off their shelves. PPW said fake goods would be marginalised as more mainland consumers craved authentic products. "There will always be a market for fake goods, but demand for authentic products is clearly on the rise," said PPW's senior licensing manager, Jennifer Chan. While there have been complaints of fake goods being sold on Taobao, the mainland's largest online shopping platform, its commercial engine Taobao Mall requires online vendors to submit valid trademarks and copyright details of brand items being sold. According to the Trade Development Council, China's market for licensed goods rose 9 per cent to US$3.1 billion in 2009 when sales in the world's largest licensed goods market, the United States, shrank 11 per cent. More Chinese manufacturers, fast-food chains and apparel retailers are seeking to put their images on their products. Boshiwa, a mainland brand of children's clothing, and milk-product producer Mengniu, for example, are discussing with PPW the use of some of its licensed figures on their products. Wennie Wong, a business development manager at Hasbro - a licensing agent for US cartoon characters Transformers and Smurfs - said they were receiving more inquiries from stationery factories about putting the figures on pencils and erasers. Raymond Ip, an assistant executive director of the TDC, said more mainland consumers were after genuine brands. "In 2009, a mainlander spent an average of just US$2.33 on licensed merchandise compared to about US$40 in Hong Kong. Imagine how big the growth will be if China catches up with Hong Kong on such purchases?" he said. Raymond Choy, the designer of a popular cartoon bear called Qee, said licensing was a business tool that every designer and artist should be familiar with. "If I hadn't explored the area, my creation would not appear on Donna Karan outfits, or adidas, or LeSports," Choy said. By licensing the bear to different merchandisers - including Mercedes Benz - Choy has made tens of millions of dollars in royalties. He hoped licensing could more than double and make up 40 per cent of his business next year. "The gross profit of selling a licensed product could be three times its cost," he said. More than 170 licensing agents of original jewellery, fashion and toy brands will exhibit their products in a three-day show hosted by the TDC starting on Monday.

Investment expert Warren Buffett will try to woo Lunar New Year audiences on the mainland, not with advice on stocks but with his musical talent, state media reported yesterday. The multibillionaire has sent China Central Television a "specially produced video" in which he sings and plays guitar in a message to mainlanders that may be included in the online version of the broadcaster's Spring Festival Gala, Xinhua reported. It cited Wang Pingjiu, one of the CCTV executives behind the annual extravaganza, as listing the Berkshire Hathaway chief executive as a surprise addition to the list of celebrity performances for the show. The Beijing Times quoted Wang as saying the station had invited Buffett to make his contribution. "Everyone knows Buffett is an investment god," Wang said. "Actually, he is not bad at singing as well. He specially recorded a video singing and playing guitar, and it will be broadcast in the gala." The Beijing Evening News said one of Buffett's two sons also appears in the video, but the paper said CCTV executives had yet to make a final decision on whether it would be included in the performance. Buffett, most familiar to mainlanders through his investment in Shenzhen-based carmaker BYD, is no stranger to musical performances. He is a keen ukulele player, and several video clips have been posted online of him performing solo and as part of a group. Although Buffett's musical preferences appear to lean heavily towards American folk and country, he has also shown he has more diverse tastes. In March 2010, Buffett stunned TV audiences in the US when he appeared in a commercial for Geico car insurance - a Berkshire Hathaway subsidiary - singing and dressed as Guns N'Roses frontman Axl Rose. Buffett was less than six months away from his 80th birthday at the time. Neither BYD nor Berkshire Hathaway could be reached for comment.

Transformers 3, which stars Shia LaBeouf and Rosie Huntington-Whiteley, was the top hit last year. China ranked as third largest film market in world - Hollywood blockbusters remain popular as mainland box office revenue sees 30pc rise, research firm says - Mainland cinema box-office revenue is expected to have surged nearly 30 per cent to 13 billion yuan (HK$16 billion) last year, with China becoming the third-largest film market in the world. But the top 10 list was still dominated by Hollywood blockbusters, a consultancy says. The Chinese film market is likely to now only trail the US and Japan, according to statistics from EntGroup, a Beijing-based research firm that specialises in the entertainment industry. The Chinese market ranked sixth with 10.17 billion yuan in revenue in 2010, up 65 per cent on 2009. The top two films last year were Hollywood blockbusters Transformers 3, which raked in 1.1 billion yuan, and Kung Fu Panda 2 (617 million yuan), followed by Zhang Yimou's The Flowers of War, the first Chinese film to feature an A-list Hollywood star, Christian Bale, which took 488 million yuan, EntGroup said. Other Hollywood films in the top 10 were Pirates of the Caribbean 4, Harry Potter and the Deadly Hallows 2, Smurfs and Fast and Furious 5. They were joined by Hong Kong director Tsui Hark's The Flying Swords of Dragon Gate (433 million yuan), Han Sanping and Huang Jianxin's Beginning of the Great Revival (412 million yuan) and Teng Huatao's Love is not Blind (352 million yuan). Two domestic movies, Aftershock and Let the Bullets Fly, ranked second and third in 2010, behind the Hollywood smash hit Avatar. Analysts said the mainland film market was seeing the fastest growth in the world, backed by more investment and a growing number of screens, with about 3,000 added last year, taking the total to more than 9,000. However, the growth was largely driven by Hollywood blockbusters despite government efforts to promote local productions. Professor Zhu Dake, of Shanghai's Tongji University, said the import quota for Hollywood and other foreign films, which was designed to protect domestic products, had not really worked. Professor Zhou Xing, from Beijing Normal University's college of art and communication, said the dominance of Hollywood films had shed light on serious issues in domestic filmmaking, with the audience losing passion for local films. "It has certainly alerted filmmakers to the fact that there is a long way to go for domestic movies to compete with Hollywood movies," he said. "Many domestic movies lack historical and cultural elements and the storytelling is distant from ordinary people's lives. "Some movies are distracted by hi-tech gimmicks ... or solely rely on big stars. There is a neglect of human or cultural elements." Despite calls by directors for a loosening of censorship, Beijing has tightened its control over cultural products by calling for the censoring of more types of content in films made and screened on the mainland in a draft law released last month. "With economic development, the censorship should gradually loosen up," Zhou said. 

China saw about US$115 billion in foreign direct investment (FDI) inflows last year, up 9 per cent from 2010, the China Daily reported on Friday, citing data from the Ministry of Commerce. The number implies China’s non-financial inward FDI fell on year-ago levels for the second consecutive month. The Commerce Ministry said previously that FDI inflow was US$103.8 billion in the first 11 months of last year, which would put December’s inflow at around US$11 billion – down around 21 per cent versus the US$14 billion seen in December 2010. China’s FDI inflow was down 9.8 per cent in November from the same month in the previous year. It was the first fall in 28 months. The Commerce Ministry said earlier this week it aimed to attract an average of US$120 billion FDI in each of the next four years. It unveiled new rules last week to encourage foreign investment in strategic emerging industries, particularly those that bring new technology and know-how to China.

China Post's new Year of the Dragon stamps designed by Chen Shaohua. A stamp marking the forthcoming Year of the Dragon is displayed in Beijing yesterday. The designer, Shenzhen-based Chen Shaohua, has defended what many internet users have described as a sinister-looking beast, saying it will help exorcise evil spirits, and represents a confident China. Tens of thousands of mainlanders joined overnight queues across the country to buy the new stamps as souvenirs or investments. Dragon stamp 'doesn't send wrong message' - Artist says his drawing symbolises a confident China and will draw luck in 2012, despite critics saying 'ferocious' beast could be misread abroad - The designer of the mainland's Year of the Dragon postage stamp has defended what some have described as a sinister-looking beast, saying it will help exorcise evil spirits and represents a confident China. The latest Lunar New Year stamp, designed by Shenzhen-based Chen Shaohua, was released by China Post yesterday with a face value of 1.20 yuan (HK$1.47). Tens of thousands of mainlanders joined overnight queues across the country to purchase the new stamp as a souvenir or investment, but many internet users say the dragon looks too ferocious and might send a signal to the world of an imperious China. But Chen said the dragon would help counteract the evil spirits of 2012, with an ancient Mayan calendar cycle believed by some to foretell the end of the world in December. The symbol would also protect China's economy at a time of global uncertainty, Chen said. "As a legendary creature in Chinese mythology, dragons have always had a dignified and awe-inspiring image," he said. Chen has previously designed postage stamps for the years of the monkey, pig and ox - the animals all depicted as genial. Chen said on his microblog that the officials who approved the stamp had asked him to adjust his design and make the dragon "kinder and more modern", but they later accepted his justifications. Contrary to Chinese perceptions that the dragon symbolises potent and auspicious powers, many Westerners consider it evil and some critics are worried outsiders could misread the design as representing an aggressive China eager to dominate the world stage. Chinese emperors used the dragon as a symbol of their imperial power for thousands of years. "I haven't thought about foreigners' perceptions of a ferocious dragon and whether it represents a rising China," Chen said, adding that he believed a rising country would exert a greater cultural influence globally, although China had not reached that stage yet. Mainland writer Zhang Yiyi criticised Chen's design as being too self-centred and lacking in international sensitivity because the image could lead to different interpretations in Western countries. "[The designer] obviously doesn't understand China's national strategies [on foreign policies]," Zhang said, suggesting that China Post should redesign it for better international recognition. For several thousands of years, the traditional lunar calendar has used 12 animals to represent each year in a 12-year cycle. The Year of the Dragon will start on January 23. This year's dragon stamp, the third of its kind issued by China Post since the founding of the People's Republic in 1949, was inspired by China's first stamp, issued by the Qing dynasty in 1878. A creative director from China Post said the postage stamp was also inspired by the famous Nine Dragon Screen built in the Forbidden City in 1773.

Matchmaking companies prosper as they help Single men and women cast their nets wider - Jiang Yelin will be 32 years old this year. As a successful senior manager in a foreign company in Beijing with a monthly salary of more than 30,000 yuan ($4,770, 3,627 euros), the only thing that upsets her is her mother's daily call urging her to get married. "I can understand my mother's hope to have someone look after me, and I did try to get involved in some relationships. By entering my 30s, I feel less need to live my life with a man, and to be honest, I think there are barely any single men who can match me in terms of salary and social status," Jiang says. At the same time, Jiang is so busy with work that she hardly has time to meet men in her daily life. "So my mother signed me up for True Love Online, a matchmaking website for wealthy people. Now I am dating someone they introduced to me," she says. With the large number of unmarried women and men in China, especially in large cities, and the still dominant concept of marrying at an early age, matchmaking businesses in China are faced with unprecedented opportunities. Tian Fanjiang, director at the Beijing-based Committee of Matchmaking Service Industries, predicts that the market value of China's matchmaking industry could be as high as 10 billion yuan a year in the next five years. The market value reached more than 3 billion yuan in 2010. Comparatively, the US online dating market is expected to top $932 million this year, according to JupiterResearch. According to the 2010 census, China has more than 180 million single people who are 28 years old or older. And most of them are highly educated and earning decent salaries. Lu Shan, founder of Lushan Marriage Group, one of China's leading matchmaking service providers, says women focus on getting an education and landing a good job at an early age. But in China, single women over the age of 27 are called shengnv, or leftover women. "These women are outstanding in their professions, and with years of hard work in education and careers, they have missed (what is considered) the golden time for marriage. And their limited social circles also restrict them from meeting the right one. This is why they come to us," Lu says. Since its founding in 2000, Lu has witnessed the change of Chinese people's concepts of matchmaking. "Before 2005, 80 percent of my clients were middle-aged and senior citizens. But in recent years, the percentage decreased to 30 percent. An increasing number of young people under 30 have signed up for matchmaking services," she says. Lu says the company now has more than 20,000 active members, more women than men. All members make at least 10,000 yuan a month and are capable of paying the minimum registration fee of 6,800 yuan. However, there are more people who are questioning the quality of service provided by matchmaking companies. Xuan Li, 29, is a fashion consultant in Beijing. After being disappointed by several unsuccessful dates arranged by a matchmaking website three years ago, Xuan says she will never use an online service again. "They charged me a high introduction fee for every man I met through them, but I found out that some of them did not match what the website had advertised. I didn't want to use online matchmakers, but it seemed like offline matchmaking agencies had just disappeared over night," she says.

Alibaba Group Holding Ltd, China's biggest e-commerce company, may not find it easy to buy Yahoo! Inc's assets after the largest US Web portal appointed a new chief executive officer, analysts said. Yahoo hired Scott Thompson as chief executive officer, according to a company statement on Wednesday, and has directed the former president of EBay Inc's PayPal unit to complete a strategic review and reverse a slump in growth that led to the ousting of Carol Bartz in September. The appointment of the new CEO suggests that Yahoo is not likely to sell all or part of itself in the near future, said Xie Wen, a Chinese IT critic who briefly worked as president of Yahoo China in 2006. "It shows that Yahoo doesn't find the sale of itself very attractive," Xie said. He added that it may take some time for the new CEO to get used to Yahoo, evaluate the sale and negotiate with various parties to make a deal, if there is one. Thompson said his priorities are boosting the company's revenue and putting it at the forefront of innovation. The new CEO will need to assess options that include divesting its Asian assets and selling a stake in itself to private equity companies. Thompson's appointment makes the sale of all of Yahoo less likely, said Brett Harriss, an analyst at Gabelli & Co. Thompson may play a role in extracting value from Yahoo's international assets. Aside from its main Internet portal business, Yahoo holds about 40 percent of Alibaba and co-owns Yahoo Japan with Softbank Corp. Yahoo estimated that the Alibaba stake was worth about $14 billion on a pretax basis in October. Thompson's primary focus will be on the "core business", and he will work closely with the board on the company's strategic review, Yahoo Chairman Roy Bostock said in the statement. Yahoo is considering a "wide range" of opportunities for the company's business, as well as specific investments or dispositions of assets," Bostock said. Some investors had speculated that Yahoo would sell itself after Bartz was ousted. "It's probably a slight negative because I think the best outcome for Yahoo would be an all-out takeover by Microsoft," said Gabelli's Harriss. "Hiring a new CEO makes the sale of the whole company unlikely." In October, Jack Ma, chief executive officer of Alibaba Group, said he was interested in buying Yahoo. Alibaba has hired a Washington DC lobbyist, according to Reuters, a move that could help Alibaba respond to any US political opposition to a complete takeover of Yahoo. Alibaba said it looks forward to working with Yahoo's new chief executive to deliver value to Yahoo shareholders, Alibaba spokesman John Spelich said on Wednesday, according to a report in the Wall Street Journal. Four banks preparing a roughly $4 billion loan for Alibaba are seeking to attract Chinese lenders into the lead group to help arrange and underwrite the loan, according to a person familiar with the matter. Credit Suisse Group AG, DBS Bank Ltd, Deutsche Bank AG and Mizuho Corporate Bank Ltd are arranging the loan, three people familiar with the matter said on Dec 15. The size of the loan is too large for the four to underwrite among themselves, said the person who spoke on Thursday, declining to be identified because the details are private. 

Hong Kong*:  Jan 7 2012 Share

Standard Chartered Bank sees an opportunity to increase its market share and gain higher margins in Asia as other European banks pull out due to constraints on liquidity and challenges posed by higher capital requirements. Jaspal Bindra, Standard Chartered’s Asia chief executive, said European banks are having trouble growing their business in Asia because of capital and liquidity constraints brought on by stricter regulations. “Right now, I don’t think it’s that they have lost their faith or confidence in the potential of Asia. It’s just that the overall challenge of the keeping capital afloat and their balance sheet at the same level, is where the challenge is,” said Bindra. Bindra said the withdrawal of European banks could create more market share and bargaining power for Standard Chartered Bank. “We have seen this happen already across many of our markets,” said Bindra. Even though more than two thirds of Standard Chartered’s income is created in Asia, a region Bindra calls “home,” he said the bank has no immediate plans to relocate its headquarters away from London, despite higher tax levies. Apart from reducing their business in Asia, European banks have the option to raise equity , but Bindal said this was a difficult time to do so. UniCredit SpA, Italy’s largest bank by total assets, this week offered stockholders a bigger-than-expected 43 per cent discount on new shares, signalling how expensive such moves could be. Meanwhile, HSBC is to lay-off 3,000 people in Hong Kong by the end of 2013. Spanish banking group BBVA was reported to have reduced staff in Asia this week. European banks in Hong Kong are also withdrawing from funding trade finance, said Michael Werner, a senior analyst at Sanford C. Bernstein. Most European banks fund their clients’ trade finances in US dollars, usually through US money market funds. The funds have become reluctant to lend them money, affecting their trade-related activities,Werner said.

Tuna in Japan sells for record HK$5.7million (US$740,000) - Kiyoshi Kimura (L), president of the Kiyomura Co. which operates the Sushi-Zanmai chain, prepares to cut the HK$5.7m worth bluefin tuna in Tokyo. Kimura was the winning bidder of the 269-kilogram bluefin tuna in the first auction of the year at Tokyo's Tsukiji fish market. A bluefin tuna caught off northeastern Japan fetched a record 56.49 million yen, or about HK$5.7 million, on Thursday in the first auction of the year at Tokyo's Tsukiji fish market. The price for the 269-kilogram (593-pound) tuna beat last year’s record of 32.49 million yen. The price translates to 210,000 yen per kilogram, or HK$9,656 per pound — also a record, said Yutaka Hasegawa, a Tsukiji market official. Though the fish is undoubtedly high quality, the price has more to do with the celebratory atmosphere that surrounds the first auction of the year. The winning bidder, Kiyoshi Kimura, president of Kiyomura Co., a sushi restaurant chain, said he wanted to “liven up Japan” and help it recover from last year’s devastating tsunami and economic stagnation, according to media reports. The tuna was caught off Oma, in Aomori prefecture and just north of the coast that was battered by the March 11 tsunami. Bluefin tuna is prized for its tender red meat. The best slices of fatty bluefin — called “o-toro” here — can sell for 2,000 yen ($24) per piece at tony Tokyo sushi bars. Beaming on television, Kimura said he wanted to keep the fish in Japan “rather than let it get taken overseas.” Last year’s bid winners were Hong Kong entrepreneur Ricky Cheng Wai-tao, who runs the Hong Kong-based chain Itamae Sushi, and an upscale Japanese restaurant in Tokyo’s Ginza district. Japanese eat 80 percent of the Atlantic and Pacific bluefins caught — the most sought-after by sushi lovers. Japanese fishermen, however, face growing calls for tighter fishing rules amid declining tuna stocks worldwide. In November 2010, the International Commission for the Conservation of Atlantic Tunas voted to cut the bluefin fishing quota in the eastern Atlantic and Mediterranean about 4 percent, from 13,500 to 12,900 metric tonnes annually. It also agreed on measures to try to improve enforcement of quotas on bluefin. The decision was strongly criticised by environmental groups, which hoped to see bluefin fishing slashed or suspended.

A computer security watchdog has warned that smartphones could become the next target of hackers after receiving a record number of security and virus alerts last year. The growing trend to cloud computing – where data is stored on remote internet servers – is also being exploited to spread malicious software and crack passwords, the Hong Kong computer emergency response team’s co-ordination centre says. The centre received 343 alerts from websites and software providers last year – its highest ever – and an 11 per cent rise from 308 last year. Manager Roy Ko Wai-tak, said the figures showed that as people became increasingly dependent on technology, hackers would target them and attempt to steal their personal information. “Smartphones these days are still not adequately protected by security tools, and the awareness of individual users is still low,” Ko said. “Other than security issues, it’s also easy for people to lose their devices or have them stolen resulting in information leakage,” he said. Mobile phone and computer users who store information on remote servers should be careful, Ko said, because once a server was hacked, a large pool of information could be stolen. While hacking alerts have risen overall, the centre said the number of reports from Hong Kong users about security breaches and viruses fell last year from 980 and 162 to 810 and 145. Managed by the Hong Kong Productivity Council, the centre aims to gather information about computer security incidents to help local enterprises and individual users.

Chairman of the Heung Yee Kuk, Lau Wong-fat. New Territories community leader Lau Wong-fat was elected chairman of the Tuen Mun District Council in a landslide vote on Thursday. This came after Lau was appointed to the council by Chief Executive Donald Tsang Yam-kuen, despite having been rejected by New Territories voters at the ballot box. The legislator, executive councillor and Heung Yee Kuk chairman won by 23 votes to seven, beating rival contender To Sheck-yuen to reclaim the job he lost in polls last year. Lau lost the post of rural committee chairman and his ex officio seat on the district council when, in an unprecedented challenge to his authority, the council changed its constitution to prevent the chairman from serving more than two four-year terms. Lau had earlier held the post for more than 40 years. Rejected by voters when he sought an elected seat on the council at last year’s district polls, he was later offered a seat by Tsang under the appointment system. Lau’s chairmanship takes immediate effect. “Uncle Fat” as he is colloquially known, has been in the news in recent months for his involvement in the controversy over the government’s efforts to get rid of illegal structures on New Territories houses. To, regarded as an ally of Lau, is a vice-chairman of the rural committee.

The number of sale and purchase agreements for all building units received for registration in December was recorded 5,597, down 6.4 percent from that of November, said the Hong Kong government on Wednesday. The number of last month decreased by 52.5 percent on a year-on- year basis, according to figures released by the Land Registry in the day. The 12-month moving average for December was 9,068, which was 5.4 percent below the 12-month moving average for November and 33.1 percent below that for December last year, said the department. The total consideration for sale and purchase agreements in the month was HK$32.6 billion($4.2 billion), down 24.4 percent from that of November, or a 38.9 percent year-on-year decline. Among the sale and purchase agreements, 4,301 were for residential units, down 10.3 percent from November, said the department. The total consideration for sale and purchase agreements in terms of residential units was HK$25.7 billion.

 China*:  Jan 7 2012 Share

China's services sector entered a seventh straight year of expansion in December, a survey of purchasing managers showed on Thursday, but a slowdown in the world's second-biggest economy saw overall levels of activity mired at three-month lows. The HSBC China services purchasing managers index (PMI) stood at 52.5 in December, unchanged from November, signalling a steady if sluggish expansion in the sector that is increasingly a barometer for domestic economic conditions. “Unmoved on November’s three-month low, the service sector PMI pointed to subdued growth momentum,” Qu Hongbin, chief economist for China and co-head of Asian economic research at HSBC said in a statement accompanying the index. That said it was the 74th straight month that the index had read above 50 – the level that demarcates expansion from contraction – and a level it has been above every month since the survey started in November 2005. The steady state of the HSBC index, compiled by UK-based data provider Markit, will reinforce the views of some investors that China’s economic slowdown will be modest and short-lived. A solid rebound in the official services PMI earlier this week followed on from a gentle bounce in manufacturing activity in both official and private sector surveys. But the sensitivity of investors to any uptick in headline economic news is arguably a function of how skewed their portfolios are towards anticipating further deterioration. “The market is very vulnerable right now to good news,” Michael Kurtz, chief Asia equity strategist at Nomura, said. Kurtz says an anticipated softening of economic data has left regional hedge fund managers with extended short positions and mutual fund managers underweight growth-sensitive stocks and overweight cash, raising the risk of a squeeze higher for equities if data comes in any better than downbeat expectations. “We think the markets have already priced in a lot of soft growth in the first half’” Kurtz said. “There is a risk of a perfect storm for upside surprises.” The global economic outlook may be dark – courtesy of Europe’s festering debt crisis and still anaemic consumption in the United States – but conditions are arguably better than those in late 2008 when global financial markets were in chaos and the HSBC Service PMI sank into the low 50s. The latest index reading of 52.5 is above levels in the first quarter of this year when Chinese monetary tightening was in full swing, dampening both domestic inflation and economic activity. Sub-indexes of prices charged and outstanding business edged below 50, although both gave readings consistent with the history of the survey – respondents appear to have an entrenched view that they have limited pricing power and insufficient work outstanding. Business expectations fell to the lowest in the services PMI’s history – though that sub-index remains far and away the most robust element of the overall survey – and were a clear signal to HSBC of the need for policy action to support economic growth in the months ahead. “More headwinds are down the road due to the still weak manufacturing sector, slower jobs growth, the ongoing property correction and cooling external demand. All these factors call for more aggressive easing measures,” Qu said. Investor expectations are building that China is poised to announce a further easing of monetary conditions after a 50 basis point cut in late November to the ratio of cash banks are required to keep as reserves. That reduction, from a record high of 21.5 per cent, is estimated to have injected about 350 billion yuan (US$56 billion) of credit into the economy. Analysts expect fourth-quarter growth data from China to show a further slowdown in the rate of economic expansion, with many forecasting annual growth to have fallen below 9 per cent in the last three months of the year.

China's central bank has unveiled detailed rules on yuan-denominated investment activities in China to pave the way for offshore yuan to flow back to its stock and bond markets, Xinhua news agency reported. The new guidelines on the implementation of the Renminbi Qualified Foreign Institutional Investors (RQFII) come after China granted a total 10.7 billion yuan (US$1.7 billion) investment quota for 10 investment firms in Hong Kong. According to the new guidelines, foreign firms should open RQFII basic deposit accounts for settlement purposes, as well as RQFII special deposit accounts, in a Chinese commercial bank qualified to act as a QFII custodian and settlement agent in the interbank bond market. Foreign firms must create a separate special deposit account for each open-ended fund they launch and cannot open a general deposit or temporary deposit account for permanent institutions otherwise approved by the PBOC. The firms can open three types of special deposit accounts for transactions in the onshore stock and bond markets and funds can be transferred between the accounts. But foreign firms will be barred from making fund transfers between special deposit accounts and basic deposit accounts. Cash withdrawals are prohibited from special deposit accounts. The RQFII scheme, also called mini-QFII, is widely regarded as a gift offered by Beijing to Hong Kong to help support the fledgling market for trading offshore yuan established in the city. Beijing has been promoting the use of the yuan in cross-border trade, building Hong Kong into an offshore yuan centre. But foreign holders of yuan can only park the money at banks or buy a limited number of yuan-denominated bonds in Hong Kong as there is a shortage of investment channels for the currency overseas.

China’s trade surplus was around US$160 billion, a modest decline from US$183.1 billion last year, Chinese Commerce Minister Chen Deming said on Thursday. China recorded a surplus of about US$21.6 billion in December, a four-month high and a sharp rise from November’s US$14.5 billion. Chen said in a statement on the commerce ministry’s website that the trade surplus share of China’s gross domestic product (GDP) dropped to about 2 per cent this year from 3.1 per cent last year. The United States has urged Beijing to keep China’s trade surplus share of GDP below 4 per cent, although that proposal has been rejected by the Chinese government. “China has achieved balanced and stable development of foreign trade this year,” Chen said. He added that China’s exports and imports totalled US$3.6 trillion last year, an increase of 20 per cent from a year ago. But Chen did not give a breakdown of exports and imports. China’s customs administration is scheduled to publish trade data for December and all of this year early next week. Chinese officials and analysts say the country’s massive export sector will face a challenging next year due to a weak global economy caused by the Europe debt crisis. China, the world’s largest exporter and the second largest importer, has targeted annual 10 per cent growth in its trade turnover through 2015.

Sinopec has kicked off 2012 with a bang. Stay tuned for more. State-owned China Petroleum & Chemical Corp., better known as Sinopec, has been on a tear in acquisitions in the past year, the most recent deal being Tuesday’s multi-billion U.S. shale deal. At the helm of Sinopec is someone who has tried, and failed in the past, in the U.S. Chairman Fu Chengyu was formerly head of another state-owned behemoth, Cnooc, or China National Offshore Oil Corp., better remembered as the company that attempted that audacious takeover of Unocal Corp. Since then, Mr. Fu has refined his acquisition strategy, taking smaller stakes in the U.S. to avoid ruffling any feathers. Failing in the Unocal bid, Cnooc later tempered its ambitions and bought a stake in a deepwater offshore field in the U.S. Gulf of Mexico, as well as U.S. shale assets from Chesapeake Energy. Mr. Fu was appointed chairman of Sinopec last April in a routine reshuffling of executives among China’s state-owned companies, and is on a mission to turn Sinopec around. It helps that the climate toward Chinese investment is noticeably more relaxed six years after the Unocal bid. For example, Chinese companies have acquired whole companies in Canada, while Asia-Pacific inbound M&A in the U.S. was at a record high last year, according to Dealogic data.

Worried about the prospects of a collapse in China’s property sector? Fear not: Zhang Chenghui and Chen Daofu, researchers at the State Council’s own think tank, have the answer. Writing in the official People’s Daily this week, the researchers proposed preventing sharp falls in house prices and achieving testing targets on affordable homes in one fell swoop (In Chinese). “If the cost of buying projects falls below the cost of constructing social housing” the authors say, “the government could come in and buy some troubled private market projects and convert them into affordable homes.” It’s a plan that could put a floor under home prices. But it would be cold comfort for developers – who would have to accept bargain basement valuations. It’s also potentially bad news for commodities markets. Building new affordable homes would underpin China’s demand for steel and other construction materials. Converting existing private projects into social housing would not.

Nokia Moving to China from Singapore - Notch one more victory for China in the battle to lure investment from the Western world. Finland’s Nokia Corp., the world’s largest mobile phone maker by volume, said it is moving its Asia-Pacific headquarters to Beijing from Singapore as part of plans to raise business efficiencies and meet savings targets. The move is a disappointment for Singapore, which along with other Southeast Asian nations has been scrambling to hold on to (or win back) Western investment after years of rising interest in China, whose rapid growth and giant consumer market helped it eclipse the one-time “tiger” economies of Southeast Asia over the past decade. More recently, many analysts have argued Southeast Asia is starting to look more attractive again as disenchantment with China spreads due to rising costs, intellectual property violations, and other problems there, along with rising incomes in Southeast Asia. Google, for instance, unveiled plans to open new offices in Kuala Lumpur and Bangkok last year, and a number of giant auto makers, including Suzuki Motor Corp., have recently announced plans to expand in Indonesia. But at the end of the day, it’s hard to beat China.

China's largest-ever civil helicopter on Thursday received its certification from the Civil Aviation Administration of China, the country's civil aviation authority. The move marks the official approval for the 13-ton AC313, Asia's largest helicopter, to enter the market, said the Aviation Industry Corporation of China (AVIC), which developed and manufactured the helicopter. The aircraft focuses on designs of maintainability, life reliability, indemnification and life cycle efficiency, and meets international safety standards, underlining China's abilities in the research and development (R&D) of large helicopters. After four years of R&D, the AC313 is also world's first civil helicopter to receive an A-category airworthiness certificate at an altitude of 4,500 meters, the AVIC said. The aircraft can be deployed for emergency rescue operations, forest fire prevention, transport, offshore operations, medical aid, sightseeing and business trips, the AVIC said. The AC313 made two trial flights to the Qinghai-Tibet Plateau in 2010 and 2011, respectively, and set a record of soaring to an altitude of 8,500 meters, making it the first domestic aircraft able to fly in the highlands, the AVIC added. The State-owned aircraft maker produces civil helicopters weighing from one to 13 tons. Its one-ton AC310 helicopter, the country's first ultra-light civil helicopter, made its debut at the first China Helicopter Exposition held last September, according to the AVIC.

A bank clerk counts yuan in Huaibei city, Anhui province. Experts say tougher criteria imposed on lenders will probably counter the effects of the official monetary policies. Implementation of the new, tougher criteria for commercial lenders set by the China Banking Regulatory Commission (CBRC) has been postponed to the second half of 2012 in response to current economic conditions and looser monetary policies, said an official on Wednesday. A government source familiar with the matter told China Daily that the new standards would probably not be effective until July. Cao Yuanzheng, chief economist at the Bank of China Ltd, said that there was a contradiction between banking regulatory policies and the nation's monetary stance, as banks might hesitate to lend in order to achieve capital criteria. "Tougher criteria imposed on lenders will probably counter the effect of official monetary policies," said Cao, adding that tougher financial regulation had become a general trend. "However, financial regulation has to act in concert with monetary policy to support the real economy, which actually produces goods and services," he said. The CBRC announced earlier in 2011 new rules setting tougher criteria for lenders' capital adequacy ratios (CAR), which were to have taken effect at the beginning of 2012. Large lenders were to achieve a CAR of 11.5 percent and a core CAR of 9.5 percent. But the delay in implementing the new standards should not be construed as a loosening of financial regulation, said Lu Zhengwei, chief economist at the Industrial Bank Co Ltd. "It is a normal counter-cyclical adjustment. When economic growth accelerates, it's necessary to require lenders to have a higher CAR than the international standard. "When the economy has increasing downside risks, it's better to go back to the international criteria, which are still relatively high," he said. "Excessively tough standards will affect banks' credit support to the real economy," said Wang Zhaoxing, vice-chairman of the CBRC, in December. Wang indicated that China would try to maintain a balance between international standards and domestic economic conditions. The CBRC's delay in implementing the new rules cannot completely resolve the contradiction between lenders' capital shortages and the country's need to shore up the economy, said Li Wei, economist at the Standard Chartered Bank (China) Ltd. "Although the financing demand of banks will show some decline as a result, accelerating capital outflows have added to the rising uncertainty surrounding market liquidity." Chinese commercial lenders also face increasing capital pressure due to deposit drains, and they will continue to seek refinancing channels in 2012, as relatively looser credit controls will prompt lenders to extend more credit and increase their capital consumption, said Qiu Zhicheng, an analyst at Guosen Securities Co Ltd. "For monetary policies, it's like sailing without wind," Qiu said. China's listed lenders may need to raise more than 100 billion yuan ($15.78 billion) through equity financing next year to replenish their capital, local media have reported. Yan Qingmin, assistant chairman of the CBRC, said earlier that capital replenishment through issues of subordinated debt and other methods would face stricter restrictions.

Hong Kong*:  Jan 6 2012 Share

James Chu Shi, the new director general of the Taipei Economic and Cultural Office, at a press conference in Wan Chai. Hong Kong-Taiwan relations will continue to improve regardless of the outcome of next week's presidential election on the island, says the new director of the Taipei Economic and Cultural Office in Hong Kong. James Chu Shi, who began work on January 1, said ties between the city and Taiwan would only strengthen following the upgrading of the name of Taiwan's main office in the city and Hong Kong's establishment of an economic, trade and cultural office in Taiwan last year. Chu's office, formerly known as Chung Hwa Travel Service, was renamed in July. "The co-operation between the two places is institutionalised and has reached a point of no return. So no matter who is going to win the election on January 14, Hong Kong-Taiwan relations can only progress in a positive direction," said Chu at his first media briefing. "However, it is hard to predict how the cross-strait relations will be affected by the result of the poll." With nine days to go before the election, opinion polls show President Ma Ying-jeou of the Kuomintang party - who is seeking a second term - with a narrow lead over Dr Tsai Ing-wen, chairwoman of the pro-independence Democratic Progressive Party, and far ahead of James Soong Chu-yu of the People First Party. It is widely believed that cross-strait stability could suffer if Tsai is elected. Hong Kong's office in Taipei, which is intended to foster long-term co-operation, opened in December. Chu said he would focus on economic co-operation between Hong Kong and Taiwan, and says securing visa-free access to Hong Kong for Taiwanese travellers is among his top priorities. "Hong Kong is the second most visited place among Taiwanese tourists even though more than 100 countries have waived visa requirement for our travellers," said Chu. After the British government gave Taiwanese travellers visa-free access in the spring of 2009, the number of Taiwanese visitors to Britain almost doubled that year. Asked if he would arrange a visit for Chief Executive Donald Tsang Yam-kuen or other senior officials, Chu replied: "As long as it can foster Taiwan-Hong Kong ties, the office will try its best to arrange [visits for the Hong Kong government]."

An orange arrow points to Szeto Wah in a group photo of staff and graduates of Hung Hom Kaifong Public School where he taught. Relatives of the late Szeto Wah donated more than 10,000 items owned by the democracy stalwart to the University of Hong Kong yesterday. The memorabilia, which included books, notebooks, calligraphy, manuscripts, photographs and letters, has been named the Szeto Wah Collection . The university said it would form a "significant addition" to its Hong Kong Collection. The family turned over the artefacts in a ceremony at the university's main library at which 50 selected items were displayed. The ceremony came two days after 100 relatives and friends gathered in a church to pay tribute to the man known affectionately to Hongkongers as "Uncle Wah" on the first anniversary of his death. Szeto, a veteran Democrat and educator, died of lung cancer at the age of 79. He was co-founder of the Democratic Party, a member of the Legislative Council from 1985 to 2004, and chairman of the Hong Kong Alliance in Support of Patriotic Democratic Movements. The late activist's younger brother Szeto Keung said the family decided the university was the best place for the artefacts. "These items will have value for people studying Brother Wah's thoughts and life," he said. University librarian Peter Sidorko said there were "some truly rich materials" among the collection. Items on display yesterday showed Szeto Wah "was a true renaissance man, an artist, a literary figure, a political figure, and a mathematician". University vice-chancellor Tsui Lap-chee thanked the family and said the items would serve as "excellent education materials". "Szeto Wah was a man of integrity," Tsui said. "He was also an intellectual. Education was his passion. He loved and cared for his students. Szeto was also a prolific writer. Through his words, he influenced many youngsters." Among the collection is a piece of calligraphy Szeto Wah completed to commemorate the 20th anniversary of June 4, 1989, and his ink-pen portrait of Russian writer Maxim Gorky, whom he admired in his younger days.

Building artificial islands for housing off the coasts of Hong Kong would be a major waste of resources and could threaten marine life, several experts said. The government has floated the idea of building man-made islands to increase land supply, and the proposal is in the early stages of discussion. Greg Wong Chak-yan, a veteran civil engineer and former vice-chairman of the Town Planning Board, said that while such a venture was feasible, it was not necessary at the present time. "Artificial islands are feasible in engineering terms, but many people might ask why we must have these reclamations. Will some people become shelterless if we don't create land from the sea?" Wong said it would make more sense to move unpopular facilities like prisons to artificial islands rather than build new homes on them. Dr Ng Cho-nam, a member of the Transport Advisory Committee who teaches geography at the University of Hong Kong, said the proposal served little purpose as there was still plenty of undeveloped land in the New Territories. He said: "How could these [artificial] islands attract development, especially when there is still lots of land in Yuen Long and Tuen Mun for use?" This sentiment was shared by Winston Chu Ka-sun, an adviser to the Society for Protection of the Harbour. He said the solution to the city's housing shortage was developing more land in the New Territories. Construction on reclaimed land would be too costly, he said. There are also environmental concerns in building man-made islands, according to groups such as the Hong Kong Dolphin Conservation Society and WWF Hong Kong. Samuel Hung Ka-yiu, chairman of the society, called the idea ridiculous and said it would put marine creatures at risk. Samantha Lee, from WWF, noted there were rich coral resources near Po Toi Island, while Tolo Harbour was a vital breeding ground for animals. "We do not oppose all reclamation but some sensitive sites have to be avoided," she said. Green Sense president Roy Tam Hoi-pong, meanwhile, said instead of providing unlimited land supply to support population growth, "the real challenge is capping the population". He said luxury housing on artificial islands might be aimed more at rich mainlanders rather than locals.

Many travel-hungry Hongkongers want to flee as far as possible from the city during the Lunar New Year holiday, with cost no problem. Employees who have Saturdays and Sundays off can enjoy a nine-day break - from January 21 to 29 - by applying for two days' annual leave on top of the three-day public holiday. Long-haul tours are in high demand, as holidaymakers plan their breaks, with some expensive trips already fully booked, travel agencies say. A HK$97,999 tour covering four countries in South America, a HK$35,599 North European icebreaker tour and nine-day tours to Ethiopia and Israel are all full, Hong Thai Travel says. Long-haul tours to the Mediterranean and Europe are 90 per cent booked even though they cost 10 per cent more than last year, Wing On Travel says. Tours during the holiday would cost 5 to 15 per cent more than last year, Hong Thai director Jason Wong Chun-tat said. "However, bargains are still available for some Southeast Asian tours because charter flights will be employed," he said. "A four-day tour to Taipei costs HK$3,699, about 10 per cent cheaper than last year. A five-day tour to Vietnam costs HK$5,299, 20 per cent cheaper than last Lunar New Year." Wing On's assistant general manager, Simon Ma Sai-man, said many frequent travellers to Japan had changed to other destinations after the nuclear scare there in March last year. The number of tour members going to Dubai had risen by 30 per cent, while Turkey and the Mediterranean region were seeing a double-digit increase. "People started booking as early as the beginning of October," Ma said. "We have had quite a cold winter this year, and people are passionate about going to warmer places in the Middle East and Mediterranean." For individual travellers, hotel and flight packages to Seoul are still available - with prices as much as 18 per cent higher than a year ago. Packages to Singapore were also more expensive, from between 8 and 24 per cent higher, the two agencies said. The Travel Industry Council earlier announced that tours to South Korea would cost from HK$4,389 to HK$20,199 at the Lunar New Year - up from last year's price range of HK$3,299 to HK$10,599. Holiday demand from mainlanders for hotels was also pushing up prices, the council said. Businessman Gabriel Lee Chi-wan and his family will take a seven-day tour to Australia, costing a total of HK$100,000. "It is the only time my kids can take an overseas trip. It is worth spending the money," the father of two said. The package includes six nights in five-star hotels in three cities.

The family of Szeto Wah donated books, notebooks, letters and other items that had belonged to the late democracy stalwart to the University of Hong Kong in a ceremony on Wednesday morning. The donation came two days after about 100 relatives and friends gathered in Chai Wan Baptist Church to pay tribute to the man known affectionately to Hongkongers as “Uncle Wah” on the first anniversary of his death. The collection includes books, manuscripts, photographs, audio-visual files and other items. The university says it will make a significant addition to its main library’s Hong Kong Collection. Szeto Keung, the late activist’s younger brother, said at the ceremony that his family had decided that the university was the best place for the artifacts. University vice-chancellor Tsui Lap-chee thanked the family for the collection.

The government on Wednesday proposed 25 reclamation sites around the coast of Hong Kong as part of efforts to increase the amount of land available for building. The sites, which include the outlying islands of Cheung Chau, Hei Ling Chau and Lamma, could provide 1,500 hectares of artificial land, the government said. The location of the sites was released on Wednesday, a month and a half after the start of a public consultation on ways to increase the land supply, which will end in February. A Development Bureau official said the sites listed were only possibilities put forward for public debate. Robin Li Kui-biu, a chief engineer in charge of harbour projects, said the sites were examples provided to assist discussion on the criteria for selecting sites, if reclamation outside Victoria Harbour was accepted as an option to increase land supply in the long term. The consultation asks the public if they agree with eight proposed criteria for site selection, including; whether a project meets local needs, its environmental impact, and cost effectiveness. No reclamation is proposed within the much-shrunken but now protected Victoria Harbour, or in Hong Kong’s marine parks. Today’s list does include five sites in Tolo Harbour, two in Silver Mine Bay on Lantau Island, one in Sandy Bay on Hong Kong Island and several in Tuen Mun. Other large reclamation sites on the list are at Beaufort Island, Peng Chau, Siu Ho Wan, southwest Tsing Yi and Lung Kwu Tang. The government wants to create enough land to build 40,000 flats a year. It has said that, as well as providing land, reclamation would be a ‘green’ way to dispose of construction fill, much of which is now shipped to the mainland. But environmentalists want the government to consider methods other than reclamation. The chief executive of environmental watchdog Green Power, Man Chi-sum, said in November – when the consultation was launched – that priority should always be given to using abandoned or abused land in the New Territories.

 China*:  Jan 6 2012 Share

Prices in first-tier cities like Beijing fell sharply last month. Average home prices in 100 major mainland cities fell last month for a fourth straight month, as government measures to slow the property sector continue to bite. Research by the China Real Estate Index System, which is owned by online property news agency Soufun Holdings, indicated that the average price in the major 100 mainland cities dropped 0.25 per cent to 8,809 yuan (HK$10,793) per square metre in December. Home prices in 60 cities fell last month, a rise from November when only 57 cities recorded price falls. Soufun said 12 cities recorded a fall of more than 1 per cent in December, and only 37 cities recorded a price rise, with prices in the remaining three cities flat. However, on a year-on-year basis, average prices in the 100 major cities were still 2.86 per cent higher. All of the biggest 10 cities recorded a fall in property prices last month, with the average price falling 0.48 per cent to 15,588 yuan per square metre, sharper than the fall of 0.36 per cent recorded in November last year. Property prices in Chengdu recorded the biggest fall with 1.1 per cent. Soufun said more cities recorded price falls and the drops last month were sharper. It said price cuts for new projects were no longer confined to first and second-tier cities, but were spreading to third and fourth-tier cities. A report by HSBC Global Research predicted the property market would remain challenging this year, despite signs of monetary easing. Sector-specific administrative measures would continue to rein in demand, HSBC said, predicting more price cuts early this year as developers strove to maintain sales. The firm forecast that residential prices would fall 20 per cent in first-tier cities and 10 per cent in other cities. "Previously, only large developers were willing to cut prices on their new projects, but in the past two months, we have seen small developers also joining in with price cuts due to tight liquidity," said Alan Chiang Sheung-lai, DTZ's head of residential property on the mainland. Chiang expects property prices in first-tier cities including Beijing, Shanghai and Shenzhen, to drop 10 per cent to 15 per cent this year, and prices in second and third-tier cities to fall 20 per cent or more. He said the volume of property sales might rise this year, because the government was not expected to impose further tightening measures and that could mean the worst might be over for the sector.

Guangdong party chief Wang Yang said the southern province would use the "Wukan approach" as a template to reform the governance of villages and townships at the grass-roots level. Some analysts said Wang's latest remarks, regarding protests last year over land-grabs in Wukan, demonstrated courage and proved he was a liberal-minded modern leader. In a speech delivered to the provincial party congress on Tuesday, which gave a glimpse of Guangdong province's future policy direction, Wang said an emphasis would be placed on restructuring the province's economy rather than pursuing growth, along with promoting the development of social organisations. "Guangdong has grown out of an era of high-speed economic growth," Wang said. "According to some official calculations, [the GDP growth in] Jiangsu province will outgrow Guangdong by 2017. We do not intend to compete with that. [Jiangsu can] go ahead if [it] wants, we need to prioritise our structural reform." Wang said the province was formulating new measures to replace past policy that referred to migrant workers as "peasant workers", to eliminate discrimination and ease the process of urban integration. He also reiterated his earlier calls to delegate social management power to non-governmental organisations in a bid to improve people's lives. According to a China News Service report on Tuesday, Wang said the handling of the Wukan incident should be used as a lesson to be studied across the province. Residents of Wukan, an eastern Guangdong fishing village, held a series of demonstrations from September to December, after local officials sold their land without offering compensation. They were also expressing frustration over the lack of democratic elections. The stand-off escalated after police tried to disperse them using force. "Guangdong deputy party secretary Zhu Mingguo leading a delegation into Shanwei's Wukan village was not only meant to solve problems in the village, but also to set a reference standard to reform village governance across Guangdong," Wang was quoted as saying. This year, Wang said, concrete measures would be taken to address disciplinary problems among local cadres at grass-roots level. "People's democratic awareness is increasing significantly in this changing society," Wang said. "When their appeals for rights aren't getting enough attention, that's when mass incidents happen." Commenting on Wang's latest remarks about Wukan and the future policy direction, Beijing-based scholar Hu Xingdou said Wang had proved himself to be a modern leader by allowing a range of participants and negotiations to resolve the Wukan incident. "I'm not worried this could lead to a sudden rise of revolts in Guangdong, as the people have long been allowed to express their grievances to a certain extent, compared with other inland provinces," Hu said. Professor To Yiu-ming of Hong Kong Baptist University's journalism department called Wang pragmatic, saying he had legitimised the Wukan protesters' actions, paving the way for a review of village governance structure. "Wang demonstrated courage in his latest remarks about tackling problems directly," To said.

Beijing will launch trade sanctions and prohibit mainland carriers from joining the European Union's emissions trading scheme, which came into effect on Sunday. It says the EU's move to include global airlines in the scheme is illegal. Under the scheme, all airlines flying to and from Europe face levies on their carbon emissions. The levies will be charged based on the entire length of a flight. The Civil Aviation Administration of China (CAAC), the regulatory agency, is considering measures to fight the emissions scheme, including banning mainland carriers from participating in it, an official said. "Various government departments are formulating retaliatory measures at the request of the China Air Transport Association and mainland airlines," said Cai Haibo, a deputy secretary-general of the association, which represents Air China (SEHK: 0753), China Eastern Airlines (SEHK: 0670), China Southern Airlines and Hainan Airlines. The US House of Representatives has passed a bill prohibiting US carriers from participating in the scheme. It awaits approval by the Senate. Niels Ladefoged, who is responsible for the scheme under the office of the commissioner for climate action, said there was a "clear requirement for airlines" to comply and there were also "clear penalties" for any failure to comply. Ladefoged would not directly comment on the threat of retaliation by China or other countries, but said: "We are not aware of any major issue of non-compliance." He said that while airlines were fully entitled to take legal action, "we are confident with the legality of the scheme". Ladefoged said US carrier Delta Air Lines had added US$3 to the cost of fares to cover its emissions commitment. Carriers which refused to pay for their carbon emissions might risk losing their landing rights at European airports, said Gabriel Sanchez, a senior fellow at the International Aviation Law Institute at DePaul University in the US. Airlines are to start making payments under the emissions scheme in 2013, which provides some lead time for Beijing to move to force the EU to delay or withdraw the plan, the CAAC official said. One option was to stop buying aircraft from European planemaker Airbus. "It is the most effective way to deter [the] European scheme," he said. France and Germany, the two major shareholders of Airbus, are cornerstone members of the EU. But the CAAC official said Beijing had yet to decide whether it was viable to launch trade sanctions against the EU. India is considering asking airlines to withhold emissions data from the EU to scupper the scheme, a civil aviation official was quoted as saying by Bloomberg yesterday. But the plan has not been finalised on concerns about the possible impact on transportation. Cathay Pacific Airways (SEHK: 0293) said it had not decided when to start charging passengers for the emissions scheme. A spokeswoman said yesterday a HK$50 charge mentioned by chief executive John Slosar last year was merely indicative.

A container vessel is loaded at Shekou in Shenzhen. Some mainland ports have delayed full enforcement of new anti-pollution regulations. Shipowners with ships calling at mainland ports face tougher oil pollution regulations, but there is still confusion about the way the rules are being implemented at the ports. All major coastal ports began enforcing the oil-spill regulations from Sunday, 21 months after the marine-pollution legislation became law in March 2010. The delay was caused by maritime-safety officials taking time to approve spill clean-up contractors and finalise procedures for enforcing the rules. But ship insurers and shipping executives said even after such a lengthy hold-up, there was still a raft of issues that needed to be clarified. Under the oil-spill and hazardous-material regulations, shipowners or ship managers have to appoint a pollution clean-up contractor to be on stand-by to tackle any spills before their ships arrive at a mainland port. Owners or managers who fail to comply face a fine of up to 50,000 yuan (HK$61,000) and risk having their ship stopped from leaving port. The regulations apply to all sea ports and Nantong on the Yangtze River. Arthur Bowring, the managing director of the Hong Kong Shipowners Association, said he thought the regulations were likely to be lightly enforced, at least initially. But the International Group of Protection and Indemnity Clubs, which represents the top 13 global ship insurers, said if no prior agreement had been signed, then it was up to the local maritime-safety administration to decide whether to allow the ship into port. A contract would need to be in place before the ship is allowed to leave. Pointing to regional differences in enforcement, the UK P&I Club said: "We have heard that the Ningbo Maritime Safety Administration (MSA) announced that they will delay enforcement of the agreement requirements until February 1. We have also heard that there may be a postponement of the requirements in Zhoushan, but this is also yet to be confirmed." Tianjin MSA was also delaying full enforcement until March 1. "The fee mechanism is also complicated, with different tariffs in all ports," said a senior executive at a Hong Kong-headquartered ship-management company. One source, closely linked to the anti-pollution industry, said: "It is a right proper mess." Insurers and shipping sources also pointed out that while the vetting of clean-up contractors had been going on for the past two years, about 90 per cent of the firms had only been certified since November. The China Maritime Safety Administration, based in Beijing, had approved about 100 clean-up contractors nationally, although the five major consortiums authorised so far were only approved last week. Nine clean-up contractors have been approved by the Maritime Safety Administration to cover ports in Shenzhen with a further 20 approved for other ports in Guangdong. Pointing to the challenges, one shipping industry executive said maritime safety officials in Shanghai would not accept what was supposed to be a model national agreement produced by China MSA in Beijing governing clean-up operations. Instead, Shanghai MSA produced its own agreement, in which it holds the charterer of the ship as being initially responsible for any clean-up. He said Shanghai MSA "does not seem to understand that the owner has the insurance cover", not the charterer.

A new online system designed to make it easier for people to buy train tickets for the Lunar New Year holiday has struggled to cope with huge demand from millions of travellers across the mainland. The week-long holiday, also known as the Spring Festival, is the world’s biggest annual migration of people as more than 200 million board trains and buses to travel across the nation to celebrate with their families. The railway ministry had hoped the online booking system would make it easier for China’s migrant workers, many of whom spend days queuing up at train stations, sometimes in freezing weather, to get a ticket. Although the holiday officially begins on January 23, demand for tickets is high many weeks in advance. The festival travel season is expected to end on February 16. Train tickets for the holiday went on sale on Sunday, but many consumers have complained that website problems have left them with less money and no ticket – if they were lucky enough to log-on to the site. “I paid 218 yuan (HK$267) online for a ticket from Shanghai to Chengdu When I went to collect the ticket a railway official told me he could not find the sales record,” Huang Siling told the Global Times. Travellers flooded social networking sites to vent their anger at spending hours trying to access the new system, only to find that tickets allocated for that day had already sold out. “Three days on end rushing for a ticket. It’s almost 10pm and I still can’t log on. What’s going on?” one web user posted on weibo, the Chinese version of Twitter. Officials have pledged to improve the website’s design and increase the network bandwidth to handle the demand, as well as refund money to out-of-pocket travellers within 15 days, state media said. But some said they were very happy with the new system, which means they no longer have to leave home to buy a ticket. “This morning I bought a ticket from Beijing to Harbin while lying in bed. After three years of queuing overnight at the train station for tickets, this is a luxury for me,” said Yuyebugui in a posting on weibo.

The Chinese currency Renminbi, or the yuan, rose 8 basis points to a record high of 6.3001 against the U.S. dollar on Wednesday, according to the China Foreign Exchange Trading System.

The USS Gerald R. Ford was supposed to help secure another half century of American naval supremacy. The hulking aircraft carrier taking shape in a dry dock in Newport News, Va., is designed to carry a crew of 4,660 and a formidable arsenal of aircraft and weapons. But an unforeseen problem cropped up between blueprint and expected delivery in 2015: China is building a new class of ballistic missiles designed to arc through the stratosphere and explode onto the deck of a U.S. carrier, killing sailors and crippling its flight deck. Since 1945, the U.S. has ruled the waters of the western Pacific, thanks in large part to a fleet of 97,000-ton carriers—each one "4.5 acres of mobile, sovereign U.S. territory," as the Navy puts it. For nearly all of those years, China had little choice but to watch American vessels ply the waters off its coast with impunity. Now China is engaged in a major military buildup. Part of its plan is to force U.S. carriers to stay farther away from its shores, Chinese military analysts say. So the U.S. is adjusting its own game plan. Without either nation saying so, both are quietly engaged in a tit-for-tat military-technology race. At stake is the balance of power in a corner of the seas that its growing rapidly in importance. Pentagon officials are reluctant to talk publicly about potential conflict with China. Unlike the Soviet Union during the Cold War, Beijing isn't an explicit enemy. During a visit to China last month, Michele Flournoy, the U.S. undersecretary of defense for policy, told a top general in the People's Liberation Army that "the U.S. does not seek to contain China," and that "we do not view China as an adversary," she recalled in a later briefing. Nevertheless, U.S. military officials often talk about preparing for a conflict in the Pacific—without mentioning who they might be fighting. The situation resembles a Harry Potter novel in which the characters refuse to utter the name of their adversary, says Andrew Krepinevich, president of the Center for Strategic and Budgetary Assessments, a think tank with close ties to the Pentagon. "You can't say China's a threat," he says. "You can't say China's a competitor." China's state media has said its new missile, called the DF-21D, was built to strike a moving ship up to about 1,700 miles away. U.S. defense analysts say the missile is designed to come in at an angle too high for U.S. defenses against sea-skimming cruise missiles and too low for defenses against other ballistic missiles. Even if U.S. systems were able to shoot down one or two, some experts say, China could overwhelm the defenses by targeting a carrier with several missiles at the same time. As such, the new missile—China says it isn't currently deployed—could push U.S. carriers farther from Chinese shores, making it more difficult for American fighter jets to penetrate its airspace or to establish air superiority in a conflict near China's borders. In response, the Navy is developing pilotless, long-range drone aircraft that could take off from aircraft carriers far out at sea and remain aloft longer than a human pilot could do safely. In addition, the Air Force wants a fleet of pilotless bombers capable of cruising over vast stretches of the Pacific. The gamesmanship extends into cyberspace. U.S. officials worry that, in the event of a conflict, China would try to attack the satellite networks that control drones, as well as military networks within the U.S. The outcome of any conflict, they believe, could turn in part on who can jam the other's electronics or hack their computer networks more quickly and effectively. Throughout history, control of the seas has been a prerequisite for any country that wants to be considered a world power. China's military buildup has included a significant naval expansion. China now has 29 submarines armed with antiship cruise missiles, compared with just eight in 2002, according to Rand Corp., another think tank with ties to the military. In August, China conducted a sea trial of its first aircraft carrier—a vessel that isn't yet fully operational.

China's property prices fell for the fourth straight month in December, adding further pressure on Chinese consumers at a time when both the domestic and global economy increasingly depend on their spending. The property slump has triggered a slowdown in sales growth of goods ranging from furniture to refrigerators. Investment in residential real estate accounts for about 12% of China's economy, but as much as 25% is tied up in a broader category that also includes industries such as construction materials and appliances, according to economists. The government had hoped that its efforts to rein in soaring real-estate prices would mean more Chinese would be able to buy homes, which in turn would keep demand for home furnishings humming. But the uncertainty around housing prices has scared away many new home buyers, making for a deeper-than-expected impact on the housing market and beyond. That could complicate China's efforts to manage a slowdown in its economy, which is increasingly geared toward domestic consumption at a time of declining demand from Europe and the U.S. At a home-furnishings market recently on the eastern outskirts of Beijing, Zhang Shuangxia, a manager of closely held Canaan Furniture Co., sat on a floral couch that has gone unnoticed by her dwindling number of shoppers. "The entire shopping plaza has been empty," Ms. Zhang said. The drop in customers, which Ms. Zhang estimated at about 50%, reflects the standstill in the housing market, she said. "If they don't buy homes, we don't sell sofas," she said. Average housing prices in 100 major cities in China fell 0.25% in December compared with November, according to data released on Wednesday by data provider China Real Estate Index System, as the central government continues its campaign to keep housing affordable. In 31 cities across China, developers sold 134 million square meters of residential real estate from January to October of last year, down from 150 million square meters of space in the 2010 period, according to data from Standard Chartered. Sales continued to slide in November. Consumer spending tied to the housing sector appears to be slipping too. Growth in sales of home appliances in the first 11 months of last year slid to 15% from 24% in the 2010 period, according to National Bureau of Statistics data that have been adjusted to account for inflation. Growth in furniture sales in the period slowed to 26% from 34% in 2010. The growth-rate declines were also felt in the overall retail sector. At the furniture mart outside of Beijing, Li Wei, the manager of a store called Fashion Furniture, sells home basics such as bookcases and beds but doesn't have extras such as baby cribs and house slippers that have helped a store like IKEA shield its sales from the property slump. Mr. Li's store had sold much of its wares to customers buying homes in a neighboring suburb called Yanjiao. But Yanjiao's fifth phase of a 50-building development is vastly unoccupied. "Our sales have plummeted," Mr. Li said. The sluggish property market is causing investor concern about home appliance makers and retailers, said Forrest Chan, an analyst at CCB International (Holdings) Ltd, China Construction Bank's investment arm. The stock price of Suning Appliance Co. Ltd., a Chinese appliance retailer, has dropped 35% in the past six months. Its rival GOME Electrical Appliances Holding Ltd.'s stock price fell 41% over the period, compared with a 23% drop of the Shanghai Stock Exchange Composite Index. Suning declined to comment. A spokesman for GOME said demand for appliances is still growing in China's smaller cities, where the retailer is expanding. Investors have already pulled back from the home-appliance sector, as government subsidies that allowed consumers to trade in their old appliances for new ones at a discount ended at the beginning of 2012, Mr. Chan said. Some analyst say that the government's restrictions and tightening measures over the past year, such as higher mortgage down payments, to control the property market have led to a healthy price decrease. "If more middle-class Chinese can afford to buy homes, there will be more buyers of washers and refrigerators," said Wei Xiaopo, an analyst at CLSA Asia-Pacific Markets. But Ma Yanfei, a business director at Boloni Home Décor Co., says he awaits the day people start buying again. Sales contracts are dropping at the private Beijing-based interior-decoration company. New business has dropped 30% from August, with the decline coming largely from markets like Shanghai, Hanghzhou, and Chengdu, where property markets have reacted strongly to government restrictions, Mr. Ma said. "If it continues, we'll have to lay people off," said Mr. Ma. Swedish furniture maker IKEA Group says its sales haven't been hurt. IKEA has protected itself from real-estate shifts by marketing itself as the go-to spot for "changes in living situations," such as new babies, house guests and seasonal changes, not just new homes, said IKEA spokeswoman Yvonne Yin. "We haven't seen sales drop in the markets in China. On the contrary, the growth of IKEA China is positive," she said.

Moviegoers walk past a film poster after leaving a cinema in Nantong, Jiangsu province. Domestic box office revenues surged 64 percent to a record 10.17 billion yuan ($1.62 billion) in 2010, and the figure is estimated to have risen 30 percent to 13 billion yuan last year, according to the State Administration of Radio, Film and Television. Jiang Defu, spokesman for China Film Co Ltd, the largest State-owned film producer and distributor, said that the company is restructuring in preparation for a listing on the Chinese mainland. "Everything is going well and we hope that the debut day will come as soon as possible," Jiang said, though he declined to give a specific date. Although China Film Co Ltd will not be the first film company to list in China, it is still drawing attention from the entertainment and financial industries because of its dominant market position. The IPO rush among entertainment companies began in 2009 when Huayi Brothers Media Group was listed on the Growth Enterprises Market of the Shenzhen Stock Exchange, the first domestic entertainment company to list on the Chinese mainland. The private film producer now has a market value of nearly 10 billion yuan ($1.5 billion). Since then, other entertainment companies have gone public in China or abroad, including Zhejiang Huace Film & TV Co Ltd, Bona Film Group and Beijing Enlight Media Co Ltd. The combination of the entertainment industry and the financial world can be seen as a sign of the rise of cultural industry, analysts said. Chen Shaofeng, vice-dean of the Institute for Cultural Industries at Peking University, forecast that 120 to 150 companies in the entertainment and media sectors might seek IPOs by 2015, propelled by the development of the cultural industry. In 2001, when China joined the World Trade Organization (WTO), only 88 films were made on the Chinese mainland. But the number surged to 526 in 2010, according to the State Administration of Radio, Film and Television (SARFT). In 2010, domestic box office revenues rose 64 percent to a record 10.17 billion yuan, and they are estimated to have risen 30 percent to 13 billion yuan in 2011, according to SARFT. Box office revenue growth has been closely linked with the expansion of cinemas. From 2002 to 2010, the number of cinemas rose from 1,019 to 2,000, while the number of screens skyrocketed from 1,834 to 6,256, data from SARFT show. "I estimate that China's film industry will generate 30 billion yuan in box office revenues within five years, with the number of screens reaching 30,000," China Film Co Chairman Han Sanping said at a forum in Beijing recently. "This will lay a solid foundation for overseas film producers and global film studios, especially those from Hollywood, to seek cooperation in China," he added. "China has a recorded history of more than 5,000 years, and its splendid civilization and culture can be the source for our movies", Jiang said. The boom in China's cultural industry is also providing many opportunities for foreign companies. Under agreements signed when China joined the WTO, 20 foreign films may be imported every year and foreign cultural enterprises can enter the Chinese market by establishing joint ventures, with a shareholding of up to 49 percent, with domestic companies. The Canadian giant movie screen maker IMAX Corp, which will have 85 screens on the Chinese mainland by the end of last year, expects the number of IMAX screens in the nation to rise to 200 in two to three years, Chief Executive Officer Richard Gelfond said in October last year. More overseas film producers and studios are coming to China in hopes of co-producing films with their Chinese counterparts, to avoid the annual quota of 20 foreign movies. "About five projects in partnership with Hollywood studios have been decided, including the one with famous US producer Mike Medavoy, who was behind the Oscar-nominated film Black Swan, and other projects are under negotiation," said Zhong Lifang, vice-chairman of Beijing Galloping Horse Media Co Ltd. Galloping Horse is a rapidly emerging film company whose movie, Eternal Moment, took in more than 200 million yuan at the box office in the first half of 2011.

Year of Dragon Stamp China - A set of stamps to mark the Year of the Dragon, slated for sales beginning Thursday, has aroused heated debate on the image of the legendary creature after China Post unveiled the design of the stamp. "The moment I saw the design of the dragon stamp on newspaper, I was almost scared to death," Zhang Yihe, a noted writer said in her post on, China's Twitter-like social networking service and microblogging service provider, on Tuesday. "The dragon on the stamp looks too ferocious," echoed one post on the Web. "It is roaring and intimidating," read another. Few mythological beasts could better arouse a national debate in China than the dragon, because Chinese believe they are descendants of the legendary creature. The stamp for the Year of the Dragon, the third set of its kind issued by China Post since 1949, used a make-up that was close to China's first stamp in 1878 during the Qing Dynasty when emperors still reigned the country. For thousands of years, the Chinese have named each year after an animal in a 12-year cycle. The dragon ranks fifth in the cycle, after the mouse, ox, tiger and rabbit, but before snake, horse, goat, monkey, rooster, dog, and pig. 2012 is the Year of the Dragon. Dragons are traditionally considered to symbolize auspicious powers in China with their control over water, rainfall, hurricane, and floods. Emperors in ancient China used the dragon as a totem of the imperial power. Chen Shaohua, designer of the new stamp, upheld his work, saying the dragon should not be too gentle in image otherwise it does not fit the portraits of dragon in the minds of most Chinese. "Dragon is the deity of the 12 animals in the Chinese Zodiac, and you can't modernize the creature like cartoons," said Chen, who once designed the emblem of Beijing's bidding for the 2008 Olympic Games. "Among the civilian people, dragon can exorcise evil spirits, avoid disasters and bless people, so we need a tough image," Chen said. Feng Shula, manager of the circulation department of China Post, defended Chen's design, saying the image of the dragon is exactly what it should look like, based on the references to the dragon robe worn by emperors in ancient China and the Nine-Dragon Wall in the Forbidden City in Beijing. "From this perspective, the new dragon stamp is a perfect combination of history and modern time," Feng said. To Zhou Zhihua, president of All-China Philatelic Federation, the discomfort at the 2012 dragon stamp among some people is understandable, given an image that is far different from the prior two sets of dragon stamps. The first set of dragon stamp issued in 1988 abandoned the awe-inspiring looking for the legendary creature and used the Chinese traditional paper-cutting art to soften its appearance. Another dragon stamp issued in 2000 combined the traditional Chinese calligraphy and the dragon pattern of the Qin (221 BC - 206 BC)and Han (206 BC -220) dynasties in design and gave a graceful exterior for the dragon. Despite the controversy, the new dragon stamp is set to bring good fortune to some people in the country. At Madian, a philatelic market in downtown Beijing, the new set of dragon stamps have been overbooked at prices much higher than its face value of 24 yuan ($3.8). "All my quota for subscription have been booked and some collectors even asked for one set of the dragon stamps at 180 yuan each," said Li Wei, a stamp and coins seller at the market. "I hope the thriving can bode well for the full-year this year, " he said.

Hong Kong*:  Jan 5 2012 Share

Hong Kong’s retail sales totalled a provisional HK$33.38 billion in November, up 23.5 per cent in value from a year earlier and up 16.9 per cent by volume, Census and Statistics Department figures showed on Tuesday. A government spokesman said retail sales grew in November on vibrant local consumption demand and tourist spending. Looking ahead, the spokesman said still largely favourable job and income conditions and thriving inbound tourism should continue to bode well for the retail business in the near term. He added that the government would stay alert to the highly uncertain external environment and monitor its affect on the local economy and consumer sentiment.

The Bank of China Tower (left to right), Grand Lisboa Casino, Casino Lisboa, Wynn Macau Casino and Mandarin Oriental diominate the Macau skyline. Casino revenue in Macau, the world’s largest gambling destination, surged 42 per cent this year to a record 267.87 billion patacas, propelled by a flood of gamblers from the mainland. December gaming revenue rose 25 per cent to 23.61 billion patacas, government figures showed on Tuesday. The result, which mark a slight slowdown in growth from last year when full-year revenue soared 58 per cent, continue to defy concerns over the global economy and a domestic credit squeeze. Some of the major players in Macau include US-owned Sands China, Wynn Macau, MGM China Holdings and Melco Crown Entertainment. The former Portuguese colony is the only place in China in which casino gambling is allowed, helping it rake in revenue five times larger than US rival Las Vegas. While Macau’s gaming revenue easily trumps that of Las Vegas, the non-gaming component accounts for less than 5 per cent of total revenue. In Las Vegas, earnings from shows, conventions and dining account for more than half of total revenue. Government officials have increased calls for the development of Macau’s gaming industry by stimulating growth in non-gaming areas such as conferences and exhibitions, hotels, retail, and food and beverage segments, pledging to support development in these areas.

Quit moaning, it's time to give praise where it's due - Moaners, groaners and grumblers had better beware. A new website launched by two entrepreneurs is looking to create a culture of praise in Hong Kong. Those pleased with good service can go online and create a page to praise that helpful waiter or shop assistant and let their bosses know about it. Danny Chan Wai-yip, co-creator of Praisage, said: "We're not trying to reduce the number of complaints - constructive complaints are good for service improvement. It's just that our culture doesn't have a well-established mechanism to praise people." Chan and his business partner, corporate training consultant Karen Au Ching-ming, argue that unnecessary complaints without praise foster a destructive environment. This creates a cycle of complaints when service sector workers, ill-treated during work hours, go off-duty and start complaining themselves. Chan, a 33-year-old former CLP Power (SEHK: 0002) manager, who has also worked in restaurants, 7-Elevens and hotels, said: "I saw how it affected my colleagues." Most Hongkongers currently work in the service sector, with around 88 per cent of the labour force employed in various services in 2009. Hong Kong was dubbed the "city of complaints" by TVB (SEHK: 0511) in its current affairs show Sunday Report in 2010. Betty Tung Chiu Hung-ping, the wife of former Chief Executive Tung Chee-hwa, famously declared that Hong Kong people like to "complain, complain, complain". On Praisage, people can log on to create a username by providing their e-mail addresses and write a note of praise about the service in any company. Around 12 staff and volunteers will screen the reviews to check if they are genuine. Kathy Chan, chief consultant for Public Communication Strategic Consultancy, Praisage's PR firm, gave her own example of a praiseworthy employee - a United Airlines flight attendant. She said: "While a senior manager said they couldn't help me keep my moon cakes frozen for the four-hour flight to Singapore, she brought me some ice to keep it fresh," she said. Praisage covers 18 different industries from retail, food and beverage, education, transport and logistics, medical, arts and culture, government to NGOs. The website has been on a trial run since November. It is free for people handing out the praise but companies who want their corporate logo on the page are asked to sign up for a paid service. Those who sign up get a direct link to their corporate site and alerts when new praise is logged. "It's a unique praise record," said Chan. "It lets companies see what customers want." Eugenia Kwok a 24-year-old solicitor, said: "I'm not sure if people will go to the site. Hong Kong people are in such a rush, it may not be effective. "But I do think it's a good idea. There should be some channel for praise, and more employers should think about joining such a site."

2011 Miss Exhibition Pageant queen Ophelia So (centre) with runners-up - Hongkongers' enthusiasm for abalone and other delicacies, bolstered by the government's HK$6,000 handouts, helped spur a 20 per cent surge in sales at last year's Hong Kong Brands and Products Expo. Sales reached more than HK$600 million at the annual expo at Victoria Park, which ended yesterday. Exhibitors said visitors were more willing to spend to stock up for the early arrival of the Lunar New Year later this month. Sales were also boosted by organised bus visits for mainlanders from Shenzhen, and visits by 4,000 low-income families, which each received a HK$500 subsidy. The 24-day fair saw a record 2.52 million visitors, 120,000 more than the previous year. More mainland visitors were in a generous spending mood. One such mainlander spent HK$180,000 on buying 1,296 cans of abalone from Tung Fong Hung. The exhibitor's stock of canned abalones ran out a week ago and was resupplied only yesterday. Another mainlander, from Fujian province, spent HK$80,000 on bird's nest and caterpillar fungus at the Imperial Bird's Nest booth. Mak Chau-ying, the company's area manager, said mainlanders accounted for a third of their customers, spending HK$8,000 on average. Local shoppers spent a modest average of HK$2,000 each. Some local visitors said the government's HK$6,000 handouts to all permanent residents motivated them to spend more. "Each time I buy something I think of the HK$6,000, and it makes me happy," said Win Lee, a housewife from Causeway Bay. The Miss Exhibition Pageant at the expo also helped to attract and amuse visitors. Separately, the week-long Computer Mall Festival, at four Sham Shui Po malls, closed yesterday with an average daily visitorship of 80,000 and sales that were well above the usual levels.

Cheng Yu-Tung’s Chow Tai Fook jewelry chain raised $2 billion in a December IPO. The name Chow Tai Fook is synonymous with all that glitters in China. This week, we looked into the jewelry giant, which went public last month, and its 86-year-old founder Cheng Yu-Tung, who escaped a war-torn China in 1940 for Macau. There he started working as an apprentice at a gold shop before turning it, years later, to the world’s biggest jeweler. Gold is the backbone for Chow Tai Fook, with more than half of its sales last year coming from rings, Buddha statues and other bangles made with the precious metal. It’s a cultural thing: Chinese tradition calls for gold to mark many of life’s major events, from birth to marriage to retirements and anniversaries. But Chow Tai Fook has been eager to go upscale and increase the revenue it derives from higher-end items (read: diamonds). It recently launched its Danseuse de Ballet collection of jewelry and has been preparing to relaunch its VIP program, it told investors last month. It has also been raising its profile through splashy events, like the glitzy diamond-related charity it hosted along with hip-hop impresario Russell Simmons in Hong Kong in September. Scene Asia also had a glimpse of how Chow Tai Fook caters to the richest of China’s rich. In December 2010, we took a look at how the company caters to its VVIPs (the extra “V,” by the way, stands for a second “very”).

‘You Are the Apple of My Eye’ star Ko Chen-tung celebrates his win at the Golden Horse Awards. “You Are the Apple of My Eye” (那些年,我們一起追的女孩) over the New Year’s weekend became Hong Kong’s highest-grossing Chinese-language film, breaking a record previously held by “Kung Fu Hustle” (功夫). The movie from Taiwanese writer-director Giddens Ko, who goes by the pen name Nine Knives (九把刀), has now earned 61.4 million Hong Kong dollars (US$7.9 million) since its Oct. 20 opening, according to Hong Kong’s Motion Picture Industry Association. That’s enough to overtake 2004′s action-comedy “Kung Fu Hustle,” starring Stephen Chow (周星馳), which earned HK$61.3 million during its initial release. “You Are the Apple of My Eye” is still in theaters and thereby sure to increase its final tally. In Taiwan, it pulled in 410 million New Taiwan dollars (US$13.5 million), according to Sony Music Entertainment Taiwan, one of the film’s producers. (It earned US$2.3 million in Singapore and US$1.4 million in Malaysia, according to Sony.) A coming-of-age comedy set in Taiwan about a group of high-school friends going through the pains of adolescence, “You Are the Apple of My Eye” struck a chord among audiences with its observations about youthful indiscretions and first love. Its success in Hong Kong is unusual because it’s a Mandarin-language movie in a Cantonese-speaking city, where action comedies with big-name stars are the mainstay. Over the weekend, Mr. Ko issued a two-page letter in appreciation of the movie’s Hong Kong fans, while the film’s two stars — Ko Chen-tung (柯震東) and Michelle Chan (陳妍希) — paid a visit to Hong Kong. They’re headed to Shanghai to promote the film in China, where it opens on Friday.

 China*:  Jan 5 2012 Share

A Chinese expedition to the coldest place on earth is taking along evidence of a possible thaw in Sino-US trade relationships. This month, scientists from the National Astronomical Observatory of China (NAOC) will head for a site known simply as Dome A. At an elevation of over 4,000 metres, it is the highest point in Antarctica. There, the scientists will assemble a telescope system that depends on a piece of equipment designed for the US Navy for its accuracy and sensitivity. Dr Liu Qiang is a researcher with NOAC's Antarctic Astronomy Group, and was involved in the design of the antarctic survey telescopes. He said in a telephone interview that their US supplier had gone to some trouble to obtain export licences for the equipment. "The US government's attitude was quite uncertain. We rejoiced when the boxes arrived," Liu said. The boxes to which Liu referred included a charge-coupled device (CCD), which converts light into electronic signals to make a digital image. Digital cameras in civilian use typically range up to 12 megapixels, but the CCD shipped to China by California-based Semiconductor Technology Associates (STA) has a capacity of 100 megapixels, suitable for producing extra-high-definition photos of the sky. However, when not gazing at distant galaxies, a sensitive telescope equipped with STA's imager could be used to track, identify and lock onto enemy countries' satellites orbiting the earth. The device is so sensitive that the NOAC scientists thought the administration of US President Barack Obama might declare the imager to be dual-use technology, meaning it could have both civilian and military applications, and would therefore be refused an export licence to China. Dr Richard Bredthauer, STA's president in San Juan Capistrano, California, confirmed in an e-mail that a version of the STA 1600 imager would be used in three telescopes set up by the Chinese government in the South Pole later this month. According to the company's website, the imager was designed and fabricated to produce extra-high-definition photos for the US Naval Observatory. But Bredthauer said: "We received clearance from both our Commerce Department and State Department for export." One reason the US administration may have approved the STA 1600's export to China is that the device captures only visible light and is blind to infrared radiation, he said. An infrared sensitive CCD can be used on spy satellites that see in the dark and can distinguish civilian installations from military ones. Bredthauer declined to comment on whether a CCD that was sensitive only to visible light could also be used for military purposes. Observatories mostly ran civilian scientific projects such as those tracing the origin of Big Bang, but sometimes they could also be used for military purposes, Liu said. "The US Navy has built and maintained the biggest network of telescopes around the globe. They certainly didn't do it for pure science." Another factor that may have inclined the US government to approve the export is competition from Europe. A company called E2V Technologies, based in England, was poised to strike a deal with China to produce a similarly sensitive device if the STA 1600's export was banned, according to Bredthauer. He said the equipment from the US included a dewar, a double layer of insulation that kept the camera from freezing solid in a place where temperatures below minus 80 degrees Celsius had been recorded. Liu said that the biggest CCD a manufacturer in China could produce was as large as a human fingernail, while this mission required one as large as the palm of a hand. Dr Zhu Xiangping - a researcher with the Xian Institute of Optics and Precision Mechanics in Shaanxi, which develops cameras for China's military and commercial satellites - confirmed that China could not produce a CCD of the size of the STA 1600. "Fabrication is a challenge. We don't have a factory that can put so many pixels on one surface," he said. "But the biggest challenge is probably the computer chip that controls the input and output. We don't have software or hardware to handle such an enormous data flow." Zhu said that the granting of an export permit for the STA 1600 was a rare occurrence, but that he expected to see similar transactions in the future as the intimate business relationships between China and the US made it increasingly difficult to ban the export of dual-use products. Over the years Beijing has urged Washington in trade negotiations to lift restrictions on hi-tech exports, saying this could help reduce the huge US trade deficit with China, which was US$273 billion in 2010. A spokesman for the China Aerospace Science and Technology Corporation, which designs satellites, advised against hoping for any easing of trade restrictions, saying that the decision to allow the export of the STA 1600 was unlikely to happen often. "The US is not worried about the military use of the product. Their biggest fear is our reverse-engineering capability, that can close some decade-long technological gaps overnight," he said. China's ambitious Antarctic projects are motivated by political and economic interests. By setting up the only habitable station and a big observatory at Dome A, Beijing wants to demonstrate China's growing muscle in science and technology, while securing an advantageous position in any future fight for oil and mineral resources on the last untapped continent.

A bottle of Wuliangye brewed in the 1960s is sold at 980,000 yuan ($155,687) at a liquor auction fair in Hangzhou, East China's Zhejiang province on Jan 2, 2012. While Moutai, another famous liquor brand in China, gained a lower hand, with a bottle packaged in clay pottery produced in late 1950s sold at 38,000 yuan ($60,368). The same type of Moutai was auctioned for 1,450,000 yuan ($230,353) in the same fair last year. 

Passengers line up to buy tickets at a railway station in Hefei, capital of Anhui province, on Sunday. The online ticket booking system was made to spare travelers the discomforts of buying tickets at stations during peak seasons, but it has been challenged by problems, including high demand. People planning trips home for the upcoming Spring Festival, which begins on Jan 23, may have been pleased to learn of the railways' new online ticket booking, but excitement has turned to frustration as huge Web traffic paralyzes the system, which at times cannot issue tickets already paid for. In Shanghai, a college student named Yang wrote in an online forum that he paid more than 200 yuan ($32) for a ticket, but the booking website failed to place his order. He tried a second time and was successful, but he had to pay again, and he will have to wait to get that extra money back. At least a dozen posts on online forums detail experiences similar to Yang's. Many other posts said the railway's telephone ticket hotline is easier to use and more reliable. Meanwhile, the crowds at train stations are growing. The number of people waiting to buy tickets at stations in Guangzhou, Guangdong province, has dramatically increased in recent days, according to Chinese media. China Railway Customer Service Center told China Daily on Monday it is trying to solve the problems and will return any extra payments within 15 working days. A China Daily reporter logged onto the booking website,, on Monday afternoon and tried without success to buy a ticket. The site was noticeably slower than before and responded "system busy" after an order was made for a ticket from Shanghai to Guangzhou. Later attempts got the same response. "The problem is because the current online purchase policy requires buyers to pay for the tickets within 20 minutes of booking them. If the website gets the payment any later, the ticket is put back with the unsold tickets to be sold again," the Ministry of Railways said on Monday. Fan Yingshu, director of the transportation department of the Beijing Railway Bureau, said at a press conference on Friday that problems between banks and payment platforms caused the delay in payments. To prevent such problems, the ministry said on Monday it has been working on extending the payment time. Efforts are also being made to increase the traffic the website can handle by increasing its network bandwidth. Online ticket sales are a new service the ministry introduced for this year's chunyun - a period of heavy traveling around Chinese New Year when typically about 2 billion trips are made. The service is intended to spare many travelers the not uncommon experience of waiting overnight in the cold of winter in a line to buy train tickets. But the system's vulnerability has become a hot topic online. "I was excited by the news at first, figuring it would make buying train tickets much easier. But now it seems the effort is just window-dressing," said a netizen named "Acar". Railway officials should have had the foresight to build a stronger system, anticipating the enormous demand the site would have to handle, Acar said. In addition to online ticket booking, the ministry has also launched a real-name ticket system, aiming at preventing scalping. Passengers are allowed to buy only one ticket with one identity certificate, to prevent scalpers from stockpiling tickets for resale. The real-name ticket system was adopted in June for high-speed trains. Since Sunday, it has been put in use with all kinds of train services. To ensure the real-name system is effective in stopping the scalping during chunyun, railway officials have decided to have ticket holders' ID cards checked at the entrances of the rail stations in all major cities. But that will also add to the waiting time at train stations, which are crowded with travelers during chunyun.

China begins a once-a-decade leadership change in 2012 that could paralyze decision-making, stir infighting and expose flaws in an ossified political system—just when urgent action is needed to steer the world's second-largest economy. The retirement of a generation of Communist Party leaders led by President Hu Jintao, expected by November, will come at a critical time for China as it grapples with flagging external demand, massive local government debt, rising labor costs, and a potential property-market collapse. The successors, expected to be led by Xi Jinping, now vice president, will have to address systemic problems ignored over the past decade.

Hong Kong*:  Jan 4 2012 Share

Father and son Chris and Francis Wu, of Glorious Fireworks, and their impressive Pattaya display. Think you saw it all at the New Year fireworks over Victoria Harbour? That was nothing compared with the record-breaking spectacular provided by a Hong Kong company in Thailand two weeks ago. To celebrate the king's 84th birthday, Glorious Fireworks was booked to provide a fireworks show over Pattaya beach that is now pending for Guinness World Record recognition for launching seven 24-inch-diameter display shells at the same time. This year's countdown fireworks on Two IFC lost its two major sponsors, Sun Hung Kai Properties (SEHK: 0016) and Henderson Land (SEHK: 0012), and had to count on the Jockey Club chipping in HK$15 million to go ahead. Glorious Fireworks has long been seeking job opportunities overseas. "Some of our jobs overseas are lucrative but they also demand much higher safety requirements and standards for the effects, which can mean higher costs," said Tom Chan, the company's chief executive officer. "Since the Pattaya show, we haven't received jobs on a comparable scale or level of complication. We would love to stage a large world-class show for Hong Kong when the opportunity arises." The Pattaya beach fireworks show cost US$3 million. Here's hoping we can get some generous property developer to come up with the big bucks needed for such a spectacular display.

Hong Kong's ambition to become Asia's arts hub could be hamstrung by a lack of home-grown talent. The city's arts institutes are scrambling to meet the increased demand for performers expected when the West Kowloon Cultural District opens its venues from 2015. Despite annual subsidies of hundreds of millions of dollars for arts development, publicly funded dance troupes and orchestras still rely overwhelmingly on foreign performers. Relatively few home-grown talents are hired - according to a survey by the South China Morning Post (SEHK: 0583) of the city's nine flagship arts groups - in striking contrast with their counterparts in South Korea and Taiwan. This shows a worrying imbalance in the city's arts development. While Hong Kong is investing more than HK$21 billion to build world class arts venues and facilities in West Kowloon, it seems to have a problem getting enough local talent to make the best use of them. Margaret Yang, chief executive of the Hong Kong Sinfonietta, warned that demand for local performers will grow sharply with the opening of the arts hub. "The ideal scenario is to nurture more local talent," she said. "They have a much deeper attachment and loyalty to a place, unlike those coming from overseas, who might just leave the city in a couple of years' time." The government pays an annual subsidy of HK$264 million for nine flagship groups - Hong Kong Ballet, Hong Kong Dance Company, City Contemporary Dance Company, Hong Kong Repertory Theatre, Chung Ying Theatre, Zuni Icosahedron, Hong Kong Philharmonic Orchestra, Hong Kong Sinfonietta and Hong Kong Chinese Orchestra. Only 10 of the 90 full-time musicians employed by the Philharmonic - which receives a subsidy of HK$62 million a year - are from the city. Fifteen of the 90 musicians, including non-Hongkongers, received tertiary-level training at the Academy of Performing Arts (APA). In Taiwan, at least 70 of the 91 musicians at the Taiwan National Symphony Orchestra were born or educated locally. In Taiwan's leading dance company, Cloud Gate Dance Theatre, 24 of the 25 dancers are locals. Similarly, more than 60 per cent of the musicians in the Seoul Philharmonic Orchestra are local talents. A lack of home-grown talent will limit local productions, forcing theatres and orchestras to rely heavily on foreign performers and content. This could make it more difficult to increase the public's interest in cultural development. At the Hong Kong Ballet, only four out of 42 full-time dancers are from the city, while 10 were trained at the APA. The troupe has 23 dancers from the mainland. Madeleine Onne, the ballet's Swedish-born artistic director, wants to see more Hongkongers in the troupe, noting that in Scandinavian companies home-grown dancers account for about half of the positions. "It's important for any company to have dancers who were born and raised locally," said Onne. "But the reality is, only a handful of Hong Kong dancers made it to the ballet troupe."

Leung Chun-ying buys produce at FarmFest 2012 yesterday. The two main chief executive hopefuls continued their election campaigns on New Year's Day, with Leung Chun-ying showing up uninvited at a DAB function in an apparent bid to canvass support from the city's largest political party. Henry Tang Ying-yen, the former chief secretary, visited two middle-class families in Heng Fa Chuen. Both men avoided taking sides in the controversy over the central government liaison office's attack on an academic survey, which sparked worries over possible interference in academic freedom. Leung, former Executive Council convenor, turned up in the morning at the Democratic Alliance for the Betterment and Progress of Hong Kong's 20th anniversary celebrations in Tamar Park, Admiralty. He said "it was unrelated to the [chief executive] election". The DAB has 147 votes in the 1,200-strong Election Committee in the March 25 race and has not endorsed a candidate. Leung said he was passing by while driving from Wan Chai to his office in Central and merely wanted to greet the group. "I saw the DAB's flags, so I stopped my car and came to see what was happening," he said. "I will canvass for nominations from Election Committee members one by one and there is certain progress. I am confident. Still, I've to keep up my work." DAB chairman Tam Yiu-chung said: "I didn't expect he would come. But this is a public area. If someone walks past, it will be difficult to ask him to leave ... And he knows our members. I don't know why he came. Perhaps he took the opportunity to meet our DAB members." Tam said the DAB had yet to decide whether to nominate the same chief executive contender, but stressed both Leung and Tang were suitable candidates. As to who the party will support, Tam said its central committee would decide at a meeting next month at the latest. Later, Leung visited a FarmFest of local produce at Fa Hui Park in Mong Kok. Asked if he was trying to win over the 60 Election Committee members of the agriculture and fisheries subsector, he said he would canvass support from various sectors. Speaking after visiting the families in Heng Fa Chuen, Tang said he too had not been invited to the DAB function and declined to comment on Leung's act. "Before and when serving in the government, I kept up a good relationship with the DAB. "I am confident that the DAB will make a decision based on the candidates' platform, visions, track records and prospects," he said. Last Thursday, Hao Tiechuan, director of publicity, culture and sports affairs at the central government's liaison office in Hong Kong, described as "unscientific" and "illogical" the way questions were posed in a recent University of Hong Kong's Public Opinion Programme survey that found locals identified themselves more strongly as Hongkongers than Chinese citizens. Asked if he agreed with Hao, Tang said: "I have long honoured academic freedom and academic autonomy. "I respect the autonomy of academics who conduct surveys or research on Hong Kong's society, and respect and safeguard everyone's free speech and freedom of expression as well." Leung said: "It is not easy to explain [the identity issue] by means of a simple survey. Such surveys can be done occasionally for reference."

The central government has pledged to provide enough safe agricultural products to Hong Kong and Macao during the Spring Festival. According to the Ministry of Commerce, from January to November last year, the mainland provided $4.95 billion worth of agricultural products to Hong Kong, a year-on-year increase of 32 percent. Meanwhile, it provided $240 million of products to Macao, an increase of 22 percent. Wenjindu port in Shenzhen, Guangdong province, which has seen the largest amount of mainland agricultural products bound for Hong Kong, witnessed 824,000 tons of fresh products worth $770 million from last January to November. Guangdong province, which is one of the mainland bases to ensure Hong Kong has enough of the agricultural products that it needs, delivers 450 trucks and more than 10 ships of fresh vegetables and meat to Hong Kong every day. The central government is also stressing the safety of the products to the two special administrative regions. Guangdong quarantine authorities have registered all farms that provide products to Hong Kong and Macao, and conducts food inspection all the way from the farm to when it is "put on the dinner table." So is the case in Henan. Since 2003, it takes only a day and a half for trucks to run from Henan to Shenzhen before people unload and ship the livestock down south. All of Henan's farms that cultivate livestock for Hong Kong were registered and approved by the country's General Administration of Quality Supervision, Inspection and Quarantine. Also, Central China's Hunan province's 65 farms that raise pigs for Hong Kong and Macao are all registered to make sure the pork meets the standard set by Hong Kong and Macao's local quarantine authorities. "As a Hong Kong citizen, I would like to say thank you to the central government," said Ip Kwok-him, member of the Legislative Council of the Hong Kong Special Administrative Region, stressing the fact that the central government makes sure that enough quality farm products arrive in Hong Kong, though mainland also faces large demand during the Spring Festival. Zhang Shuo, a Hong Kong resident, also said he feels lucky to enjoy various kinds of vegetable, fruits and other farm products at reasonable prices. "Farm products are always largely consumed when it comes to the Spring Festival. But Hong Kong enjoys stable amount of them at this time, which fills us with gratitude for the central government's care."

Animal welfare groups are urging Ocean Park to phase out its trademark dolphin performance, which they say is outdated and "circus-like" and gives a distorted impression of the animals' life in the wild. The Asia for Animals coalition, an umbrella group including the Humane Society International, the Whale and Dolphin Conservation Society and Animals Asia, says the popular show could be replaced by exhibitions and virtual reality shows. The group suggests multimedia exhibitions such as immersive theatre displays and simulation experiences, and a diver training academy where children and adults could have educational dives with scientists and marine biologists as an alternative. But Ocean Park defended its daily Sea Dreams dolphin performance, which features a narrative of a man telling his granddaughter how humans and dolphins can live in harmony. Ocean Park claims the show conveys a powerful conservation message to its five million annual visitors, and insists the behaviour displayed by the dolphins is natural and that animals are free to participate or not. In a written submission to Ocean Park, Asia for Animals said: "There are numerous activities and initiatives that Ocean Park could develop to further educate and entertain visitors without the need for live animal displays." The coalition, which has held talks with Ocean Park chairman Allan Zeman, said Ocean Park should consider a 4-D immersion theatre in an aquarium setting similar to the one at the US National Aquarium in Baltimore, which combines 3-D visual effects with sensory effects built into theatre seats and surroundings. Ocean Park's former chief veterinarian, Reimi Kinoshita, who worked there for 15 years until 2007, backs the proposals. "I would like to see the dolphins displayed in a more naturalistic setting rather than this circus-type of presentation," she said. "They are put into captivity and they are made to work every day of their lives. Some of them I admit do enjoy the show - they find it is something to do. But some find it stressful." Kinoshita said dolphins did not behave in a natural way in the performances. "When in the wild do dolphins push people around a pool?" she asked. "Food is still used as the main positive reinforcement to encourage them to perform the way they do. If they choose not to perform, then they are not given fish at that time." But Ocean Park's executive director for zoological operations and education, Suzanne Gendron, said: "We strongly believe animal presentations can influence visitors and strengthen connections to nature. "Dolphins in the wild jump, leap, swim fast and play. This is natural behaviour that we have coupled with cues to allow us to demonstrate the behaviour for our visitors during the presentations at Ocean Theatre. If they decide not to participate, we ignore the behaviour and if they chose to participate, they are positively rewarded with affection, toys, snacks, and even ice." Gendron said she supported the proposals put forward by Asia for Animals in principle, but as complementary attractions rather than as replacements for live animal displays. "Nothing replaces the impact of personal connections with live animals," she said. But "dolphins will not wave their tail or jump that high in the natural world", said Samuel Hung, chairman of the Dolphin Conservation Society. "Their behaviour is completely distorted and it sends a wrong image."

Immigration queues an hour long at airport - Tourism Board chief complains that delays at Chek Lap Kok for visitors entering Hong Kong are hindering its drive to be a 'world city' - Hong Kong's image as a tourist destination is being tarnished by queues of up to an hour long for incoming passengers at the immigration counters of Chek Lap Kok, the city's tourism board chief warns. James Tien Pei-chun has twice since September written to Director of Immigration Eric Chan Kwok-ki to alert him to complaints over the queues for non-resident passengers and asking for urgent action to reduce waiting times. Complaints to the Tourism Board - echoed by postings on international traveller websites - suggest the queues are an increasing niggle for overseas visitors and Tien says it is hindering Hong Kong's drive to be Asia's "world city". The Immigration Department says it is tackling the problem and claims that while there are bottlenecks, its own surveys show that fewer than 2 per cent of non-resident visitors queue for 15 minutes or more at the airport. Tien suggests the issue could be solved with greater flexibility over the manning of immigration counters, and the hiring of "15 to 20 more immigration officers" to man empty desks at peak arrival times. "We have one of the most efficient cities in the world but queues at immigration in the airport are probably the most inefficient part of Hong Kong - unfortunately, this is the first impression many people have of Hong Kong," he said. "People arriving in Hong Kong find themselves waiting for an hour when there are only 10 out of 20 counters open. Why not open 18 or even 20 counters at these peak times to reduce the waiting times? "It isn't going to cost that much more money. It is a question of being flexible and I really think they should be more flexible." Tien said it was unacceptable for passengers stepping off a 15-hour flight from New York or a one-hour flight from Taiwan to face a wait of up to one hour or more at immigration. He said the long queues could not be blamed on a surge in visitor arrivals, as most travellers came overland from the mainland. "If you look at the traffic at the airport, it hasn't increased that much by comparison. Our airport is still a long way from its capacity. It handles 50 million people a year but it can accommodate 70 million. So what will the queues be like when it does reach capacity?" Tien's argument is supported by comments on popular traveller websites such as Skytrax. One US visitor said on a forum: "It took almost an hour to clear immigration. There were so many people waiting in line and only three officers were working, which is unacceptable in an international airport." The Immigration Department declined to give an interview on the subject but said in a statement that it had met its 2011 performance targets of allowing 98 per cent of Hong Kong residents and 95 per cent of visitors to queue for no longer than 15 minutes at the airport. More than 98 per cent of visitors and 100 per cent of Hong Kong residents queued for less than 15 minutes between January and November last year, it said. Complaints to the department about long queues had actually fallen from 20 in 2009, to 11 in 2010 and to eight last year, it said. "The airport division of the Immigration Department takes every effort to improve the passenger clearance efficiency and meet the performance pledge," it said. "But our pledge may not be achievable during certain daily peak hours or peak periods or in complicated cases. For example, sudden bunching of arriving passengers in a short period of time may outnumber our available resources during the period." The department says it ensures during holiday periods that it minimises approval of leave applications, arranges for staff to work overtime and drafts in reinforcements. The Airport Authority said complaints from travellers about the time it takes to undergo immigration procedures rose from three in 2010 to 17 from January to November last year. "We keep in close contact with the Immigration Department, particularly over arrival peaks. We notify the Immigration Department about any expected high inflow of passengers so that the department may plan their manpower deployment and make relevant arrangements as they find appropriate."

Revellers looks on as sparks fly from Two IFC in a fireworks show to see in the new year. Maybe it was the chilly weather, or perhaps a collective sigh of relief at an economically challenging year coming to an end, but Hongkongers last night turned to the comfort of their loved ones to ring in the New Year. Tammy Chan, a 20-year-old clerk, soaked up the atmosphere with friends at Times Square in Causeway Bay. She was optimistic about 2012 for Hong Kong. "I hope the new chief executive will really help Hongkongers, especially the poor. The government can do more than HK$6,000 giveaways," she said. "The city is rife with illnesses like the bird flu, so I hope it will go away in the new year so we can all enjoy good health." As for herself, Chan wished for a clean bill of health, and a pay rise at work. In fact, a wage rise was the most popular New Year's wish of merrymakers in Times Square, many having grown tired of climbing inflation. One 23-year-old engineer, aside from wanting good health, said: "My biggest New Year's wish is a raise." By early evening, the city seemed to be swarming with more hand-holding lovebirds than usual, all beaming and excited to share a midnight kiss. Kanika, 24, was on her way home with her family to celebrate. She thought long and hard when asked what would be her New Year's wish, until her mother whispered in her ear that maybe a boyfriend would be a good wish, and she agreed with a chuckle. The roof of the IFC Mall in Central was a popular spot last night for those trying to catch the midnight fireworks and to enjoy the spectacle over the harbour. The Tsim Sha Tsui promenade was chock-full of people hours before midnight. The New Year fireworks show was under a cloud when property giants Sun Hung Kai Properties (SEHK: 0016) and Henderson Land (SEHK: 0012) pulled their sponsorship for the event, leaving taxpayers to foot the bill. But the Jockey Club then stepped in at the last minute with a HK$15 million donation.

Revellers cheer as confetti falls during New Year celebrations at Times Square in Hong Kong January 1,2012.

 China*:  Jan 4 2012 Share

An La Clover shop in Beijing. The Chinese luxury lingerie maker is determined to succeed by catering to mainland women's aspirations for a Western lifestyle. While China is well on its way to becoming the largest luxury market in the world, a number of home-grown companies are ambitious to make their own names known in an arena long dominated by foreign brands. On a December afternoon at the headquarters of Beijing Aimer Lingerie Company, one of China's largest lingerie makers, Li Cong and a couple of sales staff are checking the latest collections of bras, knickers and nighties displayed in the company's showroom. Li is the brand manager for La Clover, the high-end arm launched by Aimer five years ago. Gently picking up a red silk bra, Li said the lace used was imported from Europe and worth more than 1,000 yuan a metre (HK$1,217). The bra has a price tag of 1,880 yuan and the matching knickers are priced at 820 yuan. "Our products are by no means inferior to top European brands in terms of fabric and sewing details," Li said with confidence. The company's website describes La Clover as a luxurious, sexy and exclusive brand that mainly targets successful businesswomen, white collar professionals and rich socialites. "We are determined to build it into a world-class luxury brand from China. All we need is time," said Li. While a new generation of home-grown luxury brands has been on the rise in China, influential brands remain scarce. Chinese brands are trying to attract Chinese consumers away from their single-minded pursuit of foreign luxury brands, such as Louis Vuitton and Gucci. "If the next decade is a golden era for international luxury brands in China, it would be a `double golden era' for those local brands," said Li Yifei, former chairwoman of China at Vivaki, a French communications and advertising conglomerate, which has provided its services to several Chinese luxury brands. "They are very smart people. I think these brands will be catching up very fast over the next three to five years," she said. Chinese luxury brands have many things in common: they source the best fabrics and materials from around the world and adopt advanced manufacturing techniques to ensure product quality. They invite foreign designers to create their collections. And they open shops next to top international brands in big malls in Beijing, Shanghai and other key cities. But when it comes to building brand images, they often take two different directions. Some choose to give their brands exotic names, adopt Western-style designs and hire blue-eyed, blonde models to promote their products. "Many people consider us a foreign brand when stepping up to our counter," said Li Cong when asked why their models are mostly Westerners and use an Italian term for their brand name. "But that's not our real intention. We are a 100 per cent Chinese brand. Europe is where lingerie originated. Many of our customers have overseas work or living experiences or yearn for a Western lifestyle. Their taste is also reflected when shopping lingerie. We just cater to that." Casarte is also taking the same approach to catering to Chinese consumers' desire for a Western lifestyle. The high-end home appliance brand - launched in 2007 by Haier Group, China's largest electronic appliance maker - said its products would be "a combination of high quality and artistic appearance that reflects the true spirit of European design". The name Casarte is a combination of the Italian words la casa and arte, which literally means "art of home". Other Chinese luxury brands prefer to highlight their Chinese roots. They apply traditional Chinese cultural elements to their products, or emphasise the rarity of the fabrics and materials used in their products, which are only available in certain parts of China. Such brands include Hermes-backed lifestyle brand Shang Xia, Richemont-backed Shanghai Tang, Shanghai Viva, the luxury brand of skincare seller Shanghai Jahwa, fur coat maker NE-Tiger, and 1436 Erdos, a new luxury brand launched by the Erdos Cashmere Group, which is based in Inner Mongolia. Long Qin, spokeswoman for 1436 Erdos, said the cashmere used was from year-old goats raised in Inner Mongolia. More than 100 manufacturing processes are involved in the making of a plain sweater. Currently, prices of 1436 Erdos tops are about 5,000 to 8,000 yuan, while an overcoat sells for about 20,000 yuan. The brand has opened 22 independent shops in first-tier mainland cities and plans to expand abroad in the next couple of years. Ouyang Kun, the China office head of the World Luxury Association, said many renowned luxury brands were founded in Europe between the 18th and 20th centuries, when social turbulence created a class of wealthy people. China is undergoing a similar experience and the luxury market is entering a period of rapid growth, according to Ouyang. "But so far, there are virtually no domestic luxury brands in the true sense because most of these Chinese brands are still too young and lack a mature consumer base compared with European ones, which often have more than a hundred years of history," he said. "It would be even harder for a Chinese brand to be accepted by the Western world, especially when Chinese culture and lifestyle have not been well accepted by the Western world." Li Cong said La Clover would open more outlets in Malaysia, Hong Kong and Taiwan this year. "At this stage, we can only say we have the `genes' of a luxury brand," she said. "But what we are sure of is that people will know that the difference is there when they touch and feel our lingerie."

Three years after a melamine-tainted milk scandal destroyed public confidence in the dairy industry, it remains the most fragile part of the mainland food sector, and is widely distrusted. That perhaps explains why the public finds it hard to believe that there was nothing underhand in the revision of raw milk standards last year, despite repeated explanations by the authorities. The new standards, unveiled in March and implemented three months later, represented a substantial lowering of the bar compared with the previous standards, in place since 1986. Those doubts exploded last month when the Communist Party mouthpiece People's Daily, quoting two experts who were involved in setting the new standards, suggested the process had been "hijacked" by dairy industry giants, resulting in much lower standards. "Basically, confidence in the dairy industry and even the food safety authorities has been eaten up," said Professor Zhu Yi, from the Nutrition Engineering Institute at China Agricultural University. "Raw milk and dairy farmers were blamed for the melamine-tainted milk scandal three years ago, yet time passed and the public has not seen much progress. No explanation, no matter how scientific it sounds, can make up for the disappointment." The new standards allow as many as two million bacteria per millilitre of raw milk, whereas the old standards allowed four grades, ranging from four million to 500,000. Even the lowest level allowed before was way above standards in the West, with Europe and the United States setting maximum bacteria levels of 100,000 per millilitre and industry standards often setting the maximum at 50,000. The new mainland standards also lowered the minimum protein content of raw milk from 2.95 grams per hundred grams to 2.8 grams, a significant step away from the developed world standard of 3 grams. "Call it Chinese characteristics; no one is really sure what happened because of the lack of transparency," said one anonymous dairy association official. Lower standards made it possible for dairy companies to buy raw milk more cheaply and bring down costs, the official said. Zeng Shouying, deputy director of the China Dairy Association's dairy industry committee, told the People's Daily that the draft raw milk standards for internal discussion were put together by dairy giants: pasteurised milk by Mengniu, raw milk by Yili and sour milk by Bright. Both Zeng and Wei Ronglu, an official with the Dairy Association of Western China also quoted by the newspaper, said they attended meetings where "one third of the representatives were from dairy companies". Wei said he also attended a meeting where a final version of the draft was agreed upon with stricter standards for bacteria and protein. But when the standards were officially announced, they were lax. Both officials said they were unsure where the standards were changed or why, leaving room for speculation that special interests were protected. Yili said company representatives had attended such meetings, along with representatives of 10 other dairy companies. But it said the draft standards were just for discussion before being submitted to the authorities and a group of experts. Mengniu Dairy (SEHK: 2319) said it had made a proposal but had no final say. More experts from the Ministry of Health joined the chorus of denial. Zhang Xudong, a ministry official in charge of food safety, told Xinhua it was crucial to include nine representatives from dairy firms in the drafting process because they knew the products and processes involved. Documents posted on the ministry's website showed a panel of 70 experts, including academics, government officials, trade unionists and dairy company representatives. The initial and final drafts were all put forward by the entire panel after thorough discussions and the important decisions were made in the next two phases, where the dairy industry was not included, Zhang said. Chen Junshi, a researcher at the Chinese Centre for Disease Control and Prevention's Institute of Nutrition and Food Safety, said only government officials, with the most senior being the health and agriculture ministers, and academics were involved in the last two phases and it was a group decision. Chen said even though the standards had been changed they were still safe. "The bacteria count, which contrary to popular belief is not necessarily linked to the likelihood of the milk causing illness, just indicates the hygiene of the dairy farm environment and the transportation and collection process," Chen said. He said Europe had higher hygiene standards because its farms were better than those on the mainland. But Li Jianrong, deputy director of the Liaoning Key Laboratory for Food Safety, was not convinced. "All the explanations are just excuses," he said. "Chinese people learned to drink milk from the West. Why not apply the same safety and nutrition standards as in the US or Europe. You can't lower the standards based on the fact that your management and technology can't keep up. How come raw milk could reach the two requirement 25 years ago but not today?" A survey of raw milk quality in several northern provinces, where most of China's cows are milked, found that between 75 per cent and 90 per cent of raw milk in some provinces had failed to reach the old protein level standard in 2007 and 2008. Most mainland dairy farms are small businesses, with almost a third owning fewer than five cows. Small dairy farms are not usually as hygienic as big ones and that results in high bacteria counts in raw milk. Small-scale dairy farmers also tend not to provide high-quality feed, resulting in low protein levels in raw milk. When the same issue was debated in July, Nadamude, secretary general of the Dairy Association of Inner Mongolia, said 70 per cent of China's dairy farmers would be forced to throw out their milk or even sell some of their cows if stricter standards were imposed. He said it was more important for people to have milk than to have high quality milk. Zhu, from China Agricultural University, said the mainland did not used to have such huge demand for dairy products and most dairy farms used to be state-owned and of better quality. "Small-scale farms and poor management were blamed three years ago yet we still see dairy companies spend huge amounts on marketing rather than on improving dairy farms," she said. "It is wrong to lower the standard to fit the reality. Don't cut the foot to fit the shoe."

President Hu Jintao has warned that "hostile" powers are seeking to "Westernise" China and called for greater efforts to enhance the nation's cultural influence overseas. President Hu Jintao has warned that “hostile” powers are seeking to “Westernise” China and called for greater efforts to enhance the nation’s cultural influence overseas. Hu’s remarks published in the latest edition of Communist Party magazine Seeking the Truth arrive after Beijing ordered the culture industry – taken to include the media – to lift its game as China pushes its “soft power” abroad. “Hostile international powers are strengthening their efforts to Westernise and divide us,” Hu wrote in the article, noting “ideological and cultural fields” are their main targets. “We must be aware of the seriousness and complexity of the struggles and take powerful measures to prevent and deal with them.” Hu also called for greater efforts to develop Chinese culture to meet the “growing spiritual and cultural demands of the people” in the mainland. “The overall strength of Chinese culture and its international influence is not commensurate with China’s international status,” Hu said. “The international culture of the West is strong while we are weak.” Hu’s comments are the latest in a series of directives from Communist Party leaders seeking to tighten their control over the internet and media industry. For the past decade Beijing has been encouraging state-run media to be more competitive and less reliant on state subsidies, which has led to more critical reporting and racier programming as outlets compete for readers and viewers. But the trend towards more free-wheeling reporting, the growth of reality television programmes and the explosion of microblogging sites has undermined official efforts to control public opinion. It has also unnerved authorities who have seen previously obedient media outlets criticise their decisions and defy orders to toe the Communist Party line. In October, leaders ordered stricter control of social networking sites and better supervision of the media to “improve positive publicity” and guide public opinion on “hot and hard social issues”. The following month the country’s media watchdog said that advertisements would be prohibited during television dramas from this year, as it looks to exert more control over television and woo back viewers lost to the internet. Beijing has also earmarked 45 billion yuan (HK$55 billion) to fund the expansion of state-owned media groups including CCTV, Xinhua and China Radio International, according to previous reports.

China's manufacturing unexpectedly rebounded last month on holiday shopping, official data showed yesterday, as the economy showed some resilience despite strife in key export markets. The purchasing managers' index (PMI) reached 50.3 in December, the China Federation of Logistics and Purchasing said. A reading above 50 indicates the sector is expanding while a reading below 50 suggests a contraction. The group attributed the rebound to seasonal factors, as manufacturers ramped up production to meet higher demand from holiday shoppers for Christmas and Lunar New Year, which falls later this month. Manufacturing returned to expansion last month after contracting for the first time in 33 months in November, when the PMI fell to 49 - down 1.4 points from October - due to weaker demand from Europe and the United States. Most forecasts earlier expected the index to remain steady at 49 in December. "The rebound in December PMI indicates China's future economic growth will not have a big slowdown," said Zhang Liqun, a researcher at the Development Research Centre, a think tank with the State Council. But the economy had been affected by a slowdown in developed countries and a shift in China's own economic drivers in 2011, as the government turns more towards domestic consumption, Zhang said. The latest reading of official PMI showed a split from another measure by banking giant HSBC, which on Friday said its indicator reached 48.7 in December, up slightly from 47.4 in November. The studies have different sample sizes and methodologies. Beijing is anxious to prevent a sharp slowdown in the economy but at the same time it wants to avoid reigniting inflation, which hit a more than three year high of 6.5 per cent in July but has since slowed. Nomura estimates China's economy, the biggest contributor to global growth, will expand 7.9 per cent in 2012, the least in 13 years. Inflation is moderating after reaching a three-year high of 6.5 per cent in July. "The urgency of containing inflation isn't as high as that in the beginning of 2011," Zhou Xiaochuan , the governor of the central bank, was cited as saying in an interview published by Caixin Century Magazine on its website. President Hu Jintao said in his New Year address China aimed for steady and "relatively fast" growth in 2012 amid an increasingly unstable global recovery. Europe's sovereign-debt crisis and a crackdown on speculation in the housing market may limit the expansion. Officials are also grappling with banks' bad-loan risks after a record expansion of credit in 2009 and 2010. Xinhua yesterday said China's economy was in good shape overall and Beijing would maintain last year's economic policies. It criticised those predicting "economic collapse" for China and said the economy would "sustain its vitality and remain a beacon of hope for the still-fragile world economy," Xinhua said in another commentary. But not all are convinced. "Growth momentum will continue to wane this quarter, as the European crisis will hurt China's exports and a cooling property market will drag down domestic demand," said Zhang Zhiwei, a Hong Kong-based economist at Nomura, who has previously worked for the International Monetary Fund. "The rebound does not signal that the economy has turned around."

The "super five-star" Waldorf Astoria hotel in Shanghai, which opened in April 2011. Hotel operators continued to strengthen their foothold in China in 2011 despite the competitive market. Demand has mainly stemmed from the increasingly wealthy domestic customers. According to a report, China had 960,000 individuals with a personal wealth of $1.5 million or more in 2010. The beginning of the recovery for China's hotel market began in 2010 and in 2011 demand increased further for rooms. Hotel executives still believe that China is a safe haven for luxury hotels, despite the occupancy rate for 2011 hovering at around 60 percent. "We haven't felt the crisis that they are experiencing in the US and Europe," said Charlie Dang, general manager of Northern China for Starwood Hotels & Resorts Worldwide Inc, owner of nine hotel chains including the St. Regis, Sheraton, Westin and W brands. "The domestic economy is still very strong. Generally the second- and third-tier cities are growing rapidly and that helps our business." The American company opened 40 hotels on the mainland in the last five years. It currently has 92 hotels in operation and another 90 in the pipeline. The Crowne Plaza Hotel, owned by InterContinental Hotels Group Plc, in the third-tier city of Dandong in Northeast China's Liaoning province, reported an occupancy rate of 80 percent during the summer season and 60 percent during the winter. "These are very good results for us," said the hotel's public relations manager, Ren Shixuan. Crowne Plaza is still the only international luxury hotel in the port city. It sits in a new development area overlooking the Yalu River that marks the border between China and the Democratic People's Republic of Korea. InterContinental believed when the hotel was built in time for the Beijing Olympics, that there was scope to accommodate businessmen from the two countries. There was also potential to expand beyond first- and second-tier cities. "Our business grew 15-20 percent last year. This year, we're expecting something like 10-15 percent growth, so we're pretty optimistic about the future," Ren said. "Our current clientele is 60 percent tourists, here primarily for leisure. We're really surprised by this figure. It's really good for the hotel, because it means that we don't have to rely so heavily on business travelers and won't be hugely affected by any economic downturn," she said. Hotel operators also continued to strengthen their foothold in China in 2011 despite the competitive market. InterContinental, the largest international hotel company in Greater China has 162 hotels in operation and 143 under development. Demand has mainly stemmed from the increasingly wealthy domestic market. China had 960,000 individuals with a personal wealth of 10 million yuan ($1.5 million) or more in 2010, up by 85,000 individuals or 9.7 percent year-on-year, according to the Hurun Report, China's version of the Forbes rich list. Dang said his hotels do not rely so much on international business anymore, but rather more on the domestic market, which makes up 60 percent of the company's business across 22 hotels in Northern China. "Chinese customers used to be like 15-18 percent. Now it is 60 percent Chinese, so that's where you see the power of Chinese customers growing," said Dang. "The economic development of China makes it an attractive hotel development market as more hotel rooms are needed," said Konstanze Auernheimer, director of marketing and analysis at STR Global, a consulting and research group that has tracked hotel occupancy levels in China. Beijing's occupancy levels for the year hit 69 percent compared to Shanghai's 56 percent, according to STR Global. "Shanghai is a much more tougher market right now because of the Expo and 11,000 extra rooms. All the hotels there are feeling a drop compared to the Expo year," Dang said. Market prospects for existing international five-star hotels in the capital are looking up as there won't be a surge in the number of hotel rooms, according to Dang. "I believe next year we'll experience a peak in occupancy rates. Beijing, generally being a tourism city because of the Great Wall and the Forbidden City, helps the volume as well. Plus the government is pushing very hard for more visitors. They've just opened a convention center so that will help us as well," said the Malaysian manager, who has been in his current role since the Olympics when occupancy rates hovered around 75 to 80 percent. Beijing is where most millionaires live according to the Hurun Report, released in April. In 2010, 17.7 percent of China's luxury customers or 170,000 millionaires lived in Beijing, compared to 157,000 in Guangdong province (16.4 percent) and 132,000 in Shanghai (13.8 percent). "The long-term prospects are good for luxury and other hotels," Auernheimer said. The proliferation of international luxury hotels across China is also said to be part of a key marketing tool, used to develop brand recognition and loyalty among Chinese travelers for when they travel overseas. China soared toward new tourism records with more than 50 million outbound travelers in the first nine months of this year, according to the China Tourism Academy. International hotel operators hope the strong confidence they have shown in the Chinese market will reward them in other parts of the world where they operate.

A group of students in Shandong province have become an online hit with a homemade video lampooning the propaganda style of the state broadcasters' flagship news programs. Clips of Dormitory News Broadcast have clocked up more than 8 million hits on video sharing sites in just over a month. The 14-minute parody sends up the formulaic, dated format of China Central Television's 7pm news, taking aim at self-important party officials and their minions, gushing reports of mainland politicians' visits to minor nations and dull party meetings, and state media's obsession with long lists of insignificant details. State leaders' stilted delivery of dry-as-parchment speeches also comes under fire - with their underlings sporadically waking from slumber to clap and cheer ecstatically. The piece is anchored by a stony-faced duo sat in front of chalk-drawn maps of China and the world, who read through the dormitory's absurd news stories at high speed, maintaining perfectly deadpan expressions throughout. The students, said in some of the postings to be attending Liaocheng University, in western Shandong, are by no means the first young mainlanders to spoof the CCTV news programme, which has long been the target of urbanites' disdainful wit. However, the huge number of views for this latest video suggests the group has struck a chord with teenagers. In one segment, the student dormitory's top official pays a "formal friendly visit" to another hall, and is greeted by beaming dignitaries waving Chinese flags and their own banner - a yellow skull-and-crossbones. Another item mocks mainland media's reporting of natural disasters by recounting a "major safety accident", a burst pipe in one of the toilets that drowned a number of cockroaches. Heroic firefighters conduct a dramatic rescue operation, before a pot-bellied official arrives "at the first moment" to inspect the proceedings. The video has drawn an outpouring of praise from internet users on video-sharing sites. "I have already watched this many times. Liaocheng university students are just too talented," wrote one viewer with the username "Big Garlic Little Garlic" below one posting of the video on Youku. Others expressed surprise that the video had not fallen foul of the mainland's infamous internet censors. "It's surprising that this hasn't been harmonised," wrote one person posting under the name Fei Ruide, using a popular euphemism for the regular purging of sensitive content from mainland websites.

Chinese shoppers run into Selfridges in London as the doors open at the start of sales on Boxing Day. Britain's high-end department stores are hoping rising numbers of tourists from China will boost year-end revenues. Oxford Street is going Chinese - Top London stores saw a surge in Boxing Day bargain hunters from China, part of a growing trend that has seen them adapt to the needs of these new customers - Wealthy Chinese shoppers may give British high-end retailers the year-end sales boost they are hoping for amid record unemployment, economic gloom and poor pre-Christmas sales. Chinese bargain hunters rushed to the traditional Boxing Day start of London's sales, and department stores Selfridges and John Lewis confirmed that the number of Chinese customers is on the rise. At Selfridges' flagship London store, in a trend that started a few years ago, there were 65 per cent more Chinese customers over the whole of last year than in 2010, the company said. In its Manchester store in northwest England, the figure was up by 40 per cent. "There is an inexhaustible appetite for accessories from our Far Eastern customers, especially from China," a spokesman said. "They favour big luxury brands, iconic products and buy across the fashion spectrum focusing on designer labels." A spokeswoman for John Lewis said the number of international customers had jumped 14 per cent during its post-Christmas sales, with the most popular items being computers, cosmetics and handbags. Retailers are acting to cash in on the rising tide of shoppers. Selfridges has doubled the number of Mandarin-speaking floor staff since 2010 and now has more than 20 at its glitzy Oxford Street store. In Manchester, it has five. In addition to language skills, staff in Manchester recently received training from the Confucius Institute cultural centre, with topics including China's history and how to greet Chinese customers and read their body language. To help Chinese shoppers who do not have international credit cards, a number of British retailers are installing terminals that can access China's largest electronic payment network, Chinese UnionPay. Selfridges began accepting the card in April 2010 and now has 75 terminals. Harrods, London's most famous department store, has 100. In September last year, the city's five-star Ritz London became the first hotel to accept payments for services through the card. According to a report released in November by Britain's national tourism agency, Chinese travellers are the fourth-biggest-spending tourists. The report said that Chinese shoppers spent an average of £1,310 (HK$14,300) during a trip to London's West End and half of Burberry's sales in the capital were to Chinese tourists. However, the influx of Chinese money was mainly going towards luxury brands, said Howard Archer, the chief British economist for IHS Global Insight. "There are certainly reports that there has been significant interest from Chinese buyers in the UK sales, and there are very good bargains to be had given the struggles that UK retailers have had," he said. "But in the overall scheme of things, the number of Chinese consumers will remain too small to have a really significant impact on the UK retailing sector in general. It will be a few, likely top-end-of-the-scale retailers that will benefit." A property developer in Wales is also hoping to cash in on Chinese tourism. Maxhard is proposing a £50 million luxury resort in Carmarthenshire, aimed at attracting up to 20,000 Chinese tourists every year.

The seasonal Ice Palace Restaurant and Ice Bar at Shangri-La Hotel, Harbin is greeting guests from 24 December 2011. The Ice Palace and Ice Bar is Shangri-La Hotel, Harbin's unique seasonal restaurant.

Models pose next to Lamborghini sports cars at an auto show in Shanghai. Sales of luxury vehicles in China may hit a new record in 2011 as the number of wealthy families in the country increases, experts say. Wang Yubing, a marketing manager at a Fortune 500 multinational company in Shanghai, recently began thinking about quitting his respectable and secure job to start a business. The 34-year-old, who has a master's degree in business administration from the United States, wants to become an entrepreneur in his hometown, Shenmu, a coal-rich county in Yulin, a city in Northwest China's Shaanxi province. "When I went back to my home to visit my relatives during the National Day holiday in October, all of the Hummers, Porsches and Land Rover SUVs, as well luxury Mercedes-Benzes and BMW high-performance sedans, that were screaming past me on the bumpy roads in that remote small county were a real surprise," Wang said. An idea came into his mind. "There are some good opportunities for starting a 4S (sales, spare parts, service, survey) store for the owners of these luxury vehicles," Wang said. He began speaking with Mercedes-Benz, Audi, Jaguar, Land Rover and other manufacturers about his interest in becoming a dealer for them. "With the help of my relatives in Shenmu (a county 700 kilometers west of Beijing), I am quite optimistic about the prospects of my business there," he said. "The millionaires there always want to have another type of luxury vehicle in their garages." Just three hours' drive away from Shenmu lies the city of Erdos, which is in North China's Inner Mongolia autonomous region and is the most famous site for coal mines in China. It has drawn much attention lately, making headlines for the difficulty observers have had in trying to count how many millionaires have made their fortunes from the coal-mining business in the region. Although the city's architecture looks much like what one can find in other medium-sized Chinese cities, nearly all of the vehicles seen in Erdos' streets or parking lots carry the brands of premium foreign carmakers and have large engines. Among the brands that are common there are BMW and Mercedes. Shanxi, a neighboring province in North China and the location of two-thirds of China's coal resources, is estimated by the industry to contain around 5 percent of all luxury vehicles in China, where more automobiles are sold than any other market in the world. On Nov 30, the British premium car brand Bentley opened its 17th showroom in China in the provincial capital city of Taiyuan. Half a month before, it had opened a dealership in Zhengzhou, capital city of Central China's Henan province. And two weeks after establishing the showroom, the company put the cap on the prosperous year it had seen in 2011 by celebrating the opening of a new dealership in Chongqing, in Southwest China. It is expected to sell 1,600 vehicles in China in 2011, twice as many as it had in 2010. Zheng Shunjing, vice-president of Bentley's China operations, said he is convinced that the company has a great potential to grow further in the market, where it already sells the second largest number of cars. He said Bentley plans to bring new vehicle models to China and open from four to five dealerships in the country each year. Most of them are to be in the emerging markets in China's medium-sized cities. The same month, Infiniti, the luxury brand of the Japanese automaker Nissan, opened its first 4S store in the city, and Italy's Automobili Lamborghini Holding SpA also plans to establish new dealerships in Taiyuan next year. The Italian maker of sports cars has been in China for seven years and has sold 300 vehicles there this year, making China its top market in the world. Lamborghini's decision in December to open showrooms in Chongqing and Dalian, Northeast China's Liaoning province, gave the company 11 dealerships in China. And it is testing out three others: in Kunming, Southwest China's Yunnan province; Qingdao, East China's Shandong province; and Wuhan, Central China's Hubei province. Stephan Winkelmann, Lamborghini president and CEO, said the company plans to spend more on marketing and services and accelerate its expansion so that it has 20 dealers by the end of 2012. It intends to reach those goals by entering markets in medium-sized cities in 2012, including those in Xi'an, Northwest China's Shaanxi province; Shenyang, Northeast China's Liaoning province; Taiyuan, North China's Shanxi province; Nanjing, East China's Jiangsu province; Changsha, Central China's Hunan province; and Wenzhou, East China's Zhejiang province. "We see further growth potential in the Chinese market as more and more younger people desire an individual and uncompromising lifestyle," Winkelmann said. According to the 2011 World Wealth Report by Cap Gemini SA and Bank of America Corp, the number of millionaires in China grew by 12 percent to 534,500 in 2011, putting the country fourth in that regard behind the US, Japan and Germany. The premium car brand Rolls-Royce also saw booming sales in China in 2011, receiving large contributions from its new dealers in Chengdu, capital city of Southwest Sichuan province; Shenzhen in South China's Guangdong province; and Hangzhou, East China's Zhejiang province. "Some special spot markets, like Taiyuan, and Wenzhou, as well as more third- and fourth-tier cities will be our focus in the further development of Porsche's business in the future," said Helmut Broeker, chief executive officer of Porsche (China) Motors Ltd. China has been the market where the second largest number of sales have taken place for the German luxury brand. More than half of its sales in China have been of the Cayenne SUV, which costs more than 1 million yuan ($158,730). "We expect it to beat the US to be our No 1 market in 2014, with significant sales growth from another coming SUV model, the Cajun," Broeker said. By then, Porsche plans to have 100 dealerships in China. It now has 39, meaning it must add about 20 in each of the next two years. Automobile sales slowed down in China in 2011 after increasing for two years in a row, going up by only 5 percent this year. Even so, sales of luxury brands still increased by about 30 percent and super luxury brands had more than 60 percent growth. Of all sales in Europe and the United States, only 0.2 percent were of super luxury brands. In China, the figure was only 0.05 percent, indicating that the carmakers have much room for growth. The global consulting firm McKinsey & Company predicted that, by 2015, China will contain more than 4 million wealthy households, giving it the fourth-largest number of wealthy households in any country in the world, following the United States, Japan and the United Kingdom. The number of wealthy households - defined as urban households with an annual income of more than 250,000 yuan - reached 1.6 million in 2008. About 30 percent of the wealthy now live in China's mega municipalities and cities, such as Beijing and Shanghai. Even so, McKinsey estimates that three-quarters of the sales growth for products marketed to wealthy consumers will come from people who do not live in the four biggest cities. The investment banking and securities firm Goldman Sachs also forecast that the number of consumers of luxury goods in China will increase from 40 million now to 160 million during the next five years and that a majority of them will be in medium-sized cities. Moreover, of all the money such consumers spend in a year, 40 percent is going to luxury vehicles. Take Zhengzhou as an example. This year the city welcomed a new Audi showroom, a Jaguar and Land Rover 4S store, a Bentley 4S store, BMW's third store and Cadillac's second showroom. Now under construction are Audi's fourth store there and a Ferrari and a Rolls-Royce showroom. "China has caught up with the US" as a top market for luxury vehicles, said Zhong Shi, an independent auto analyst. "China's premium luxury car market will continue to boom in the coming years. No matter how industry policies change, the special and niche segment will not be affected." "More importantly, China has greater potential for sustainable growth. There are always the 'new rich' and the recently wealthy from all social backgrounds and potentially from smaller cities," Zhong said.

Visitors take photographs of a light show at "Temple of Heaven" during the New Year Countdown Ceremony in Beijing January 1, 2012.

American Meghan Cochran (left) and Jenny von Reiche from Germany learn how to make dumplings at The Hutong's cooking school. The rising number of expatriates and tourists to Beijing has had a hand in helping businesses that target foreigners flourish. There were an estimated 110,000 expatriates living in Beijing in 2010. A number of companies have shown how they can successfully sell Chinese culture to English speakers in Beijing. On a recent brisk afternoon, Meghan Cochran swung by one of China's few remaining hutong areas in Beijing's Beixinqiao district. Huddled around a large kitchen table with a handful of other foreigners, the medical intern set out to master the art of making dumplings. "It's on my list of things to do before returning to the United States," she says. The cultural education center she visited, aptly named The Hutong, has been attracting English speakers like Cochran who seek a deeper understanding of Chinese culture. The company offers a range of workshops and other classes including tea workshops, tai chi, kungfu, traditional Chinese medicine, photography, writing and painting. Classes range from 60 ($9.46) to 240 yuan. "We've noticed other cooking schools opening up and other people offering similar services. I mean, it keeps us on our toes," says The Hutong's general manager Morgan O'Hara. What began in 2007 as a creative space for the company's founders, Australians Mark Thirwall and Stacey Shine, has grown into a steady source of income. "We're quite a humble business. We're profitable. We're sustainable, I mean we have nine full time staff now," O'Hara says. The number of expatriates and tourists to Beijing has had a hand in helping the businesses that target foreigners flourish. Last year there were an estimated 110,000 expatriates living in Beijing. The number of overseas tourists to the capital city reached more than 4.9 million in 2010. "Each year we have at least 100,000 people (come through our doors)," says Feng Cheng, who claims his company China Culture Center (CCC), based in Beijing's Chaoyang District and founded in 2000, is the longest-running operator of cultural programs. CCC offers a variety of programs including feng shui, Chinese handicrafts, calligraphy, and even cricket fighting. The majority of the participants are aged between 35-60 and comprise expatriates and their friends. "My husband is working, so I had to find something creative to do with my time," says one participant who took part in a Chinese knot-tying class. Although these cultural programs are popular, they rarely make ends meet. In fact, they're sometimes heavily subsidized by the company's other division - travel tours. "In the beginning my goal was to organize only culture classes, not to organize travel or trips. But just a year later, I had to reevaluate. All the classes that we ran and our off-the-beaten-track tours of the city couldn't cover the cost of running the company," Feng says. Other companies also smell success off the beaten track. Beijing Hikers, for example, leads groups to mountains around Beijing three days a week. Sun Huilin, the company's founder, began by leading regular hikes on the weekends with friends. The company started by "pure accident", sparked by a lot of interest from outside the group. "To start the company we needed no money. It was just a group of people going out and we were covering the fees and I was covering a bit of my own expenses," says Sun Huilin, 42, who has since handed over most of the company's duties to her younger sister, Sun Huijie, 32. The sisters, both art degree holders, have seen their company grow three to four-fold since its inauguration. "We're running twice as many hikes compared with when we started, plus we specialize in trips for schools, companies, embassies," Sun says. What has allowed cultural companies to prosper, especially in Beijing, is the demand that comes from foreigners interested in the heart of Chinese culture. "Beijing is different. It's the cultural center of China. Secondly, the foreigners make you feel the culture," Feng says. Another factor is that each of the companies, regardless of whether they're run by a native Chinese or foreigners, have fluent English-speaking staff. CCC classes are held with the help of a translator. Beijing Hiker's head tour guide Sun has a good grasp of English. "The tour guide was really nice, she led us on the Silver Pagoda Loop that took us away from the usual tourist spots through the countryside and small villages" says 22-year old Australian Kelvin Tjia. "There was definitely a niche. Looking back I realize what we did and I realize why Beijing Hikers has become so successful. The niche is that it's an English-speaking organizer of hiking trips for English speakers," Huilin, the older sister, says. Beijing Hikers leads groups on more than 70 self-made trails. Their original target was originally the expatriate community, but the company is finding that foreign travelers now make up over 60 percent of their clientele. Competitors who want a share of the niche market have copied some of their maps, the younger sister claims. "I think the main challenge for other similar companies is the following, which we have but they don't have as much. We built our following by being the avant-garde on this hiking scene. We're always developing new trails. If something becomes too popular we'll abandon it," Sun says. Since the popularity of China as a travel destination dropped off soon after the 2008 Beijing Olympic Games, the focus for cultural companies has been on refining and improving their services. Some are also thinking of expansion. The real challenge for The Hutong at this point, according to O'Hara, is branching out, trying not to just cater for the expatriate market, but also to a Chinese market. "It's kind of easy to get access to the expat market, I guess it (Chinese market) is the next goal for us," he says. Another way of expanding the business is to open up a base in Shanghai, offering similar services, although discussions are only in their initial stages. "A place like this in Shanghai would do quite well," O'Hara says. Beijing Hikers is looking at expanding through more long-distance hikes outside of Beijing, such as Xinjiang's Silk Road, Shanxi's Pinyao and Yunnan province. The challenge for CCC, Feng says, is to look at how to compete with other travel companies that have proliferated since laws were relaxed one to two years ago that enabled foreigners to run tourism companies in China. "We're not very ambitious in the sense we want to make a big company. We want to make this into a true cultural center," Feng says.

Hong Kong*:  Jan 3 2012 Share

Yue Yuen, which produces shoes for Nike and its rival adidas, says Asia is now its largest market. Yue Yuen stock falls as costs hit earnings - Footwear maker is wrongfooted by markedly higher raw material and wage expenses as profit dives 6.2pc to US$450m despite 22pc surge in revenue to US$7b. Footwear maker Yue Yuen Industrial (SEHK: 0551, announcements, news) has posted a 6.2 per cent fall in full-year net earnings despite a significant rise in revenue, as costs buffeted margins. Shares of Yue Yuen, which makes shoes for Nike and adidas, closed down 1.8 per cent at HK$24.55 yesterday after posting the worse-than-expected results for the fiscal year ending in September. Revenue surged 21.7 per cent to US$7.04 billion from a year earlier. But net profit declined to US$449.8 million, hit by a 24 per cent rise in raw material costs and a 38.5 per cent surge in wages. Kenny Tang Sing-hing, general manager of AMTD Financial Planning, expects Yue Yuen's profit margins to improve next year because prices of raw materials - such as rubber and plastic - have begun declining from their highs this month. Sales volumes should also remain stable because demand for athletics shoes is less vulnerable to economic downturns than that for other consumer goods, says Tang. The Guangdong-based firm made 326.6 million pairs of shoes during its fiscal year, up 14 per cent from the previous year. Sales of athletics shoes accounted for more than half of total revenue, while casual and outdoor shoes accounted for 17 per cent. Yue Yuen's retail business contributed 20 per cent of revenue. Asia is now Yue Yuen's largest market, followed by the United States and Europe. As of the end of September, Yue Yuan had 3,055 directly-operated outlets on the mainland and 3,357 sub-distributors across the North Asia region. During its fiscal year, Yue Yuen increased the number of production lines by 16 per cent to 537, with most of them located in China, Vietnam and Indonesia. The firm said it expected the European soccer finals in June next year and the London Olympics in August to lift sales of its products.

Hong Kong Airlines will launch passenger and cargo flights to Taiwan early next year after a new air services arrangement was signed yesterday that will see increases in passenger and cargo capacity and flights to new destinations. The carrier confirmed that it had secured traffic rights to Taiwan just hours after the new flight pact was signed by the Hong Kong-Taiwan Economic and Cultural Co-operation and Promotion Council and the Taiwan-Hong Kong Economic and Cultural Co-operation Council. The two semi-official councils are allowed to sign agreements on behalf of the Hong Kong and Taiwanese governments. The airline said that under the air services deal it could operate passenger and all-cargo services to Taipei and Kaohsiung with immediate effect. "Hong Kong Airlines will launch four daily passenger flights and all-cargo services with 650 tonnes per week on Taipei or Kaohsiung routes," it said. They would start "to operate in the first quarter of 2012". Under the air services deal, the total number of flights operated by Hong Kong and Taiwan airlines between Hong Kong and Taipei and Kaohsiung has increased immediately from 340 per week to 396. This will rise by a further 14 flights from March 25, when new summer airline schedules are introduced. Cargo capacity has been increased from a total of 3,400 tonnes per week to 5,600 tonnes with a further increase of 400 tonnes per week from March. The pact also lifts all restrictions on the number of airlines that can fly between Hong Kong and Taiwan and allows charter flights to six destinations in Taiwan including Taichung, Hualien and Kinmen. Welcoming the changes, a Cathay Pacific Airways (SEHK: 0293) spokeswoman said: "We are glad to see the signing of the air services arrangement between the two sides. We are always interested in operating more flights to Taipei and other destinations in Taiwan." Flights to Taiwan have traditionally been one of Cathay Pacific's "golden routes": highly profitable and with high passenger loads despite competition from Taiwanese carriers and the launch of cross-strait flights between the mainland and Taiwan in mid-2008. She said Cathay Pacific and Dragonair had already been operating all the flights they were allowed before the signing of the new air services arrangement. With Hong Kong airlines allowed 170 flights a week to Taipei and Kaohsiung, Cathay Pacific currently flies 108 times a week to Taipei. Dragonair also operates 21 times a week to Taipei and offers 42 services to Kaohsiung. The extra flights follow a steady rise in the number of visitors from Hong Kong and Macau to Taiwan. Figures from Taiwan's Ministry of Transport and Communications showed 794,362 travellers from Hong Kong and Macau visited Taiwan last year, up from 718,806 in 2009. There were 655,356 visitors from Hong Kong and Macau in the first 10 months of this year, the latest figures available. By comparison, there were almost 1.98 million visitors from Taiwan to Hong Kong between January and last month, which was virtually unchanged from the first 11 months of last year, according to the Hong Kong Tourism Board.

Despite the financial crisis and high inflation, almost two thirds of Hongkongers say they have been happy with their lot in 2011 - the highest proportion in six years, according to a University of Hong Kong survey. Last year the "happiness" quota was 56 per cent, compared to 55 per cent in 2009 and 52 per cent in 2008. However, the telephone survey of 1,007 people, conducted between December 12 and 20, reveals only a third of people - 33 per cent - are happy with how Hong Kong has been run in the past 12 months, 11 percentage points down from last year. The main concerns were over housing, corruption and the wealth gap. Chinese University of Hong Kong academic Victor Zheng Wan-tai said Hongkongers felt fortunate in comparison with those in places ravaged by disasters and political chaos. "Hong Kong people love to compare. Telecommunication is so advanced that Hong Kong people can obtain information easily ... about the situations elsewhere," he said. "After seeing the severe economic crisis in Europe, the political chaos in the Middle East as well as the tragedies in Japan ... we start to feel lucky. "That is why Hong Kong people are still happy despite social problems and economic downturn." However, 48 per cent of respondents said they were pessimistic about the coming year, compared with 20 per cent last year.

French expatriates living in Hong Kong will soon be able to vote in France's June legislative elections after Paris extended voting rights to 1.5 million citizens living abroad. France has segmented the world into 11 constituencies, each of which will have its own parliamentary representative in Paris. Hong Kong is included in the 11th constituency, which is the largest by far, extending from Ukraine to Japan and encompassing 49 countries including China, India, and Russia. There are 115,000 French people living in the 11th constituency, more than 25 per cent of whom live in China, including Hong Kong, Taiwan and Macau. The move will give French expatriates full political representation in both the lower and upper chambers of parliament. Currently, French expatriates are only able to vote for 12 senators in the upper chamber, through indirect elections. In July 2008, the country's constitution was modified and 11 parliamentary seats were created at the National Assembly. Italian and Portuguese expatriates enjoy a similar, but more indirect, political representation. With two days left before the deadline expired, many French citizens in Hong Kong were rushing to their consulate to register as voters. Sebastien Jaunatre, French viceconsul in Hong Kong, said there were more than 10,200 French citizens registered at the consulate as of December 28. That includes 6,050 who chose to vote directly in Hong Kong instead of asking a relative to cast a ballot in France for them. Jaunatre estimated that the consulate received about 20 new registrations every day in the past two weeks, instead of the usual five. "This is a typical situation a year before major elections," said Jaunatre. In Shanghai, French consulate employees are also busy processing applications before 6pm today, when registrations close. "The 11th constituency is so large that it will be difficult to go everywhere and reach everyone," said Marc Villard, the candidate for the French Socialist Party, who lives in Vietnam. He has already scheduled a meeting with voters in Hong Kong on January 10 at the Novotel Century hotel in Wan Chai. "We want to put an emphasis on China," Villard said. His alternate, Laure Desmonts, is a human resources consultant based in Guangzhou since 2004. Social security, taxation and schooling are the three main issues for the French community in the city. The French consulate says the average age of a French citizen in Hong Kong is 30, thanks to the number of French children. Although the French International School of Hong Kong is expanding rapidly, a major concern of the community is maintaining the quality of a French-based education at a reasonable cost to families. "We also have to address the issue of people who no longer have their expatriate status, and end up with a much smaller salary and social protection," said Francis Nizet, an independent right-wing candidate based in Beijing. Nizert said that while Hong Kong had been relatively unaffected by the global economic uncertainties, he had seen some French expatriates, hired on local wages, become economically vulnerable on the mainland. The candidates who have said they are running agreed it was too early to start campaigning, as the legislative elections would take place on June 10 and 17. "People are focused on the presidential elections at the moment," said Villard, who plans to use social media to reach the 115,000 French people living in the 11th constituency.

The row between the government and CLP Power (SEHK: 0002) over tariff rises has been settled two days before the new charge is to be introduced, after the utility lowered its proposed increase for the second time. CLP will raise the tariff by only 4.9 per cent, a significant reduction from the original 9.2 per cent it sought when it announced the increase on December 13. It is also lower than the 7.4 per cent under a revised proposal it put forward on December 16. The company has also decided to shelve the proposed tariff structure changes for business users, pending further consultations with the affected parties. But it will stick to the original proposal to raise its fuel charge by 3.7 HK cents per kilowatt hour unit. The adjustments were made amid strong public and government pressure against what officials had said were excessive rises in the face of an economic slowdown expected next year, although CLP Power had said it was under unprecedented cost pressures. Betty Yuen So Siu-mei, vice-chairwoman of CLP Power, told a news briefing: "This final package is a result of extensive discussions with the government and has addressed their concerns. We believe the government will find it acceptable." Business groups, including the Hong Kong General Chamber of Commerce and Hong Kong Federation of Industries, welcomed the cut. However, environment secretary Edward Yau Tang-wah refused to say whether he accepted it. "They have responded to our queries already," Yau said. Yuen said the reduction was largely achieved by a special rebate of 3.3 cents per kilowatt hour, assuming the company wins a court case and gets refunded for land rent and rates overcharged by the government. It has also cancelled, as requested by the government, capital expenditure on additional generation capacity, which resulted in a 0.8 cent per unit cut in basic tariff. It will also use the tariff stabilisation fund to offset part of the increase. Yuen sidestepped allegations that the company had cheated the public after initially insisting that it had done its best to minimise its proposed increases, saying only that the firm's cost pressures were genuine. She also refused to confirm whether the firm would still earn the maximum 9.99 per cent rate of return based on its fixed assets, under its arrangement with the government, and insisted that a balance had been struck between the interests of customers and its shareholders. However, Ronnie Hui Ka-wah, an energy advisory committee member, said he still felt cheated by CLP, because the proposed tariff rise still hit 8 per cent after excluding the one-off rebate. He said: "The rent and rate refund belongs to us, the power users, anyway, while the basic tariff cut is meagre." Tommy Cheung Yu-yan, a Liberal Party Legislative Council member representing the catering trade, welcomed the adjustment. But he said he wanted the power company to shelve the proposed tariff structure change permanently. Greenpeace, which has lobbied for a cancellation of the bulk-use discount, criticized CLP for favouring big business.

Residents and environmentalists opposing the construction of a super incinerator off Lantau have been dealt a blow after the government's environmental advisory body officially endorsed the plan yesterday. However, the endorsement has fuelled momentum for a looming legal challenge against the massive project to be built on 16 hectares of reclaimed land at Shek Kwu Chau, an island south of Lantau that for many years has housed a drug rehabilitation centre. A retired solicitor and Lantau Island restaurant owner yesterday said he would seek a judicial review of the decision if the government continued to push ahead with their original plan to build the incinerator, which will be able to process 3,000 tonnes of rubbish a day. The threat came as the Advisory Council on the Environment yesterday approved the multibillion-dollar project at a meeting yesterday, which means the authorities can proceed with the project if funding is approved by the Legislative Council. As the meeting took place, about 50 opponents of the project staged a noisy protest outside. It was the second attempt by the Environmental Protection Department to push through the project in the advisory body, after sidelining it during a court case relating to the Hong Kong-Zhuhai-Macau bridge project earlier this year. Environmentalists and other opponents to the project say the super incinerator, as one of the largest and most expensive of its kind in the world, is not the best option for waste management and would pose a threat to marine life in the area. The project will cost between HK$8 billion and HK$13 billion. Eddie Tse, a member of the alliance opposing the incinerator, criticised the advisory council yesterday for hastily approving the project at a closed-door meeting. Following the endorsement, which includes an option to build the facility in Tuen Mun, the EPD will finalise the plan and table it in the Legislative Council to seek funding. Advisory council member Tsang Kam-lam said yesterday that the environmental assessment report so far had shown that the project would not harm its surroundings. He also admitted that some members preferred Tuen Mun as a location. Tom Hope, who manages a restaurant at Cheung Sha Beach, said yesterday he and others would launch a judicial review if the government proceeds with the incinerator on the grounds that it has not adequately explored the best technology for waste management. Hope yesterday sent a formal notice to the Secretary for Environment Edward Yau Tang-wah, Chief Executive Donald Tsang Yam-kuen and members of the advisory council. The Environmental Protection Department declined to comment on any legal challenge.

A magistrate praised two Hong Kong youth soccer stars for resisting bribes as he sent one of their teammates to a detention centre yesterday for trying to get them to throw a showpiece international game that left the government red-faced. Sentencing Iu Wai, 20, Peter Law Tak-chuen said an attempt to fix a friendly game between Hong Kong and Russian youth sides last month was "very serious" because it put a stigma on the city. In a case that further embarrassed scandal-plagued local soccer administrators as well as the government, Iu had earlier pleaded guilty in Kowloon City Court to two counts of offering an advantage. The game was arranged by Chief Executive Donald Tsang Yam-kuen during a visit to the city by Russian President Dmitry Medvedev in April in what was seen at the time as an important public-relations coup. Law praised defender Chan Cham-hei and goalkeeper Chiu Yu-ming for resisting the temptation to take tens of thousands of dollars offered by Iu. They alerted the Independent Commission Against Corruption. Iu, an up-and-coming defender for Hong Kong Sapling club, who was also in the Hong Kong under-21 side, will serve up to 12 months under strict discipline in a sentence used as an alternative to prison for young offenders. He was arrested when graft-busters raided the international match, attended by 5,000 spectators at Mong Kok Stadium on November 5. The Russians won 2-1. Sentencing Iu, the magistrate said it was a tremendous privilege to represent Hong Kong and he lamented the possible end of Iu's promising soccer career. "By making a big mistake, you have fallen from grace. That blow for you must be enormous," Law said. "[This] case is very serious. First, it was premeditated. Second, you recruited members for the syndicate. Third, you put temptation in front of your mates. Fourth, the boys were playing for Hong Kong and dealings of this sort must bring Hong Kong into disrepute," he said. Noting defence submissions that the opposition was an overpowering team and the result was predestined, Law said: "We can afford to lose so long as the boys show sportsmanship. However, if it is a match played without integrity or dignity, it is not a match we can afford." Before sentencing Iu, the magistrate called for a report on his suitability for the detention centre. The time actually served depends on their progress. Philip Lee Fai-lap, Sapling team manager, hoped that Iu's case would sent a warning to all young footballers, reminding them that they should stay clean. The court heard earlier that Iu was approached by a man in Shenzhen who asked him to fix the match. Iu set out to lure Chan and Chiu during a four-day training camp days before the match. Last year, Iu was arrested but not charged when mainlander Yu Yang was jailed for 10 months for trying to fix a First Division match between Happy Valley and Fourway Rangers.

 China*:  Jan 3 2012 Share

A dispute between a consortium led by Shanghai Zendai Property and Fosun International has erupted after Shanghai Zendai sold its shares in a jointly-held prime Shanghai site to another developer. Fosun International yesterday released an announcement saying that it was surprised by the proposed stake transfer of the Bund 8-11 site in Shanghai to Soho China (SEHK: 0410) by Shanghai Zendai and its consortium partner, Greentown China Holdings (SEHK: 3900). The Bund 8-11 site became the most expensive site in Shanghai last year when it was sold for 9.22 billion yuan (HK$11.24 billion) at a land auction. Fosun, which owned 50 per cent of the site, said it enjoyed pre-emptive rights to buy the remaining shares owned by the consortium and, if necessary, would take legal action to defend its interest. Shanghai Zendai defended its deal with Soho China, claiming it did not constitute a direct transfer of the equity interest in the project company that owned the site, nor did it breach Fosun's pre-emptive rights. The company had taken into account the commercial terms offered by other potential investors, including Fosun, when it considered the proposed deal. Under the agreement with Soho, Shanghai Zendai and Greentown sold their stakes of two subsidiaries that held shares in the company that owned the site, for 4 billion yuan. Zhang Gin, a lawyer at Dacheng Law Offices, said Fosun could file a court action to invalidate the transaction if Zendai sold the project company directly. "However, the current proposed deal could proceed as Zendai is selling the subsidiaries that hold the shares of the project company," he said. "That's the loophole." Alan Jin, regional property researcher at Mizuho Securities Asia, said it was unlikely Fosun and Zendai would settle the dispute in court. "The awkward 50:50 ownership structure means both of them will not compromise easily, which is a concern for the project and for both Soho China and Fosun," Jin said. "Soho China may bear a more negative impact than Fosun, which is a larger company where property development is only part of its many businesses." Standard & Poor's Ratings Services yesterday said that its rating and outlook on Zendai were not affected by the deal. The deal, if concluded, would strengthen Zendai's liquidity, Standard & Poors said. The 2.96 billion yuan raised in the deal would reduce refinancing risks and significantly lower leverage if is was used to repay debt. Fosun International's shares rose 0.25 per cent to HK$4.06 yesterday, while Soho China's shares climbed 0.98 per cent to HK$5.17.

IT was a year to make us think and reflect upon China's achievements and headlong economic development as well as their cost. It was an eventful year filled with terrible, happy, ridiculous, tragic and inspiring news. The economy grew at a slower rate and the stock market greatly disappointed investors, but real estate prices finally started falling, giving some hope to those who haven't been able to afford a home. China's first space lab module Tiangong-1 blasted off while its first aircraft carrier, the Varyag, completed a successful sea trial - both triumphs for indigenous technology and Chinese ingenuity. Meanwhile the heavily invested and promoted high-speed train crashed into another train, taking 40 lives, shocking the nation and prompting rethinking of what many call too-rapid development of the rail system - and growth in general. Many people asked whether growth at any price is worth the price. A toddler was run over by two vans and left mortally wounded by 18 passersby who didn't stop to help in Guangdong Province, while another toddler was saved from certain death by an ordinary, 31-year-old woman who broke the child's fall from a building in Hangzhou. These and other cases promoted soul-searching about ethics, morality and lack of good Samaritans who fear they will be sued by greedy people for causing harm. At the end of the year, Shanghai Daily picks a few of the most thought-provoking news events of the year. Sky-high hopes - There was inspirational news as well and reason to reach for the stars. In September, China's first space lab module Tiangong-1 blasted off from Jiuquan Satellite Launch Center in the northwest desert in Gansu Province. In November, the unmanned spacecraft Shenzhou-8 took off to dock with Tiangong-1 in an orbit 343 kilometers above the earth, marking China's first space docking. Followup & comment: China is expected to become the third country to operate a permanent space station around the year 2020. A space lab is expected around 2016. Also, China plans two more docking missions next year and is training its first female astronauts, both former air cargo pilots. 'Most beautiful mother' In July, Wu Juping, an ordinary 31-year-old worker in Hangzhou, became famous as "the most beautiful mother." When toddler Zhang Fangyu, better known as Niu Niu, fell from her 10th-floor apartment, Wu rushed to catch her, though she seriously fractured her left arm. Her heroism made headlines at a time when self-sacrifice seems a rare commodity. Netizens called her "the most beautiful mother" because of her beauty of spirit. A sculpture of two hands holding a baby was installed. Followup & comment: Wu's selfless act promoted people to look for more good deeds done by ordinary people. The term "most beautiful" also became popular on the Internet as Netizens began to post photos or ordinary heroes all over China. A 58-year-old garbage recycler who rescued a two-year-old toddler in Guangdong Province was called "the most beautiful grandma." A young woman who shared her umbrella with a handicapped beggar in Suzhou was "the most beautiful goddess." Charity endangered. In June, 20-year-old Guo Meimei stirred widespread outrage among microbloggers over her flaunting of wealth, posting photos of her Maserati and a dozen Hermes bags - apparently from a rich boyfriend working for a charity. She claimed to work for Red Cross Commerce (no relation to the Red Cross charity), which caused a crisis of confidence in the China Red Cross Society (not affiliated with the Red Cross in Switzerland). Charitable donations fell as people doubted the legitimacy of many charities. Followup & comment: The uproar raised issues about charitable organizations and the value of donating - a relatively new concept in China. 

A young couple in Shanghai take a picture against a New Year's decoration featuring the God of Fortune and dragons. 2012 is the Year of the Dragon in the Chinese lunar calendar. Locals can ascend tall observation towers, go shopping and enjoy discounts at tourist sites this weekend. Tonight there are New Year's Eve countdowns on the Bund and in Xintiandi and temple bell striking at Longhua Temple.

One of the biggest public-housing projects in history will help determine whether China can remake its real-estate sector fast enough to prevent its economy from flaming out. China is in the midst of a crash program to build 36 million subsidized apartments by the end of 2015—enough units to house the entire population of Germany. The goal is twofold: to head off social unrest by ensuring decent places to live for low-wage workers, but also to cushion an expected fall in high-end construction—the result of policies to tame property speculation—by ramping up construction at the low end: so-called social housing. "Social housing is the No. 1 priority when it comes to support economic growth, ensure social stability and bring down average housing prices, as far as the government is concerned," said UBS analysts Tao Wang and Harrison Hu in a recent note. The slowdown in China's growth is becoming evident in nearly every new release of economic data. On Friday, a manufacturing survey indicated contraction for a second straight month. Exports, which along with real estate have become the economy's biggest question marks, showed a pronounced dip in the HSBC's Purchasing Managing Index, which came in at 48.7 in December, below the 50 reading that marks expansion. Beijing's trading partners are closely watching its economic shifts: China's construction sector uses as much steel annually as the U.S., Japan and Germany combined, Ms. Wang notes. Glass, concrete, energy, furniture, home appliances and other industries also rely on China's housing market. In China, those sectors account for more than 25% of GDP, and the social-housing push thus aims to be a form of economic stimulus that could spell the difference between a gentle slowing of China's growth—or a sharp plunge. But the vast experiment faces a number of pitfalls that could risk damaging a crucial economic engine at a time of weakness elsewhere around the globe. Those problems include inflated accounts of progress, shoddy construction and problematic financing. One of China's most ambitious social-housing efforts is under way in the southwestern metropolis of Chongqing. Last month, Xiang Yuankun, a 26-year-old Chongqing factory worker, moved into a two-bedroom rental for just $85 a month. He snagged the apartment after entering a lottery for those earning less than 2,000 yuan, or $315, a month and living in less than 13 square meters, or 140 square feet, the size of a parking space. His new apartment "is a privilege," he says. But critics argue that Beijing is mismanaging the social-housing effort. While the central government set the housing goal, it has largely left the implementation and financing to local governments, which get much of their revenue by selling land to developers for luxury apartments, not low-profit housing. There is widespread suspicion that Chinese municipalities are inflating the number of apartments they are building, or relabeling projects already under construction as social housing. In November, for instance, the Ministry of Housing said work on foundations was sufficient to qualify as "housing starts," prompting derision that it was counting holes in the ground. Of 30 developers surveyed by Standard Chartered Bank, 21 said that less than 30% of the social housing being built was actually new construction. The social-housing project may also lead to bad loans a few year's down the road. "The lion's share of the funding comes from the [state-owned] banking system," said He Fan, an economist at the Chinese Academy of Social Sciences. While apartment sales may turn a profit, rental properties probably won't, which "will be a heavy burden for banks," he said. He compares the program to "highways in the desert," which he claims some local governments have built to meet highway-construction targets.

When a British businessman said in the 1840s, "if we could only persuade every person in China to lengthen his shirt-tail by a foot, we could keep the mills of Lancashire working round the clock," he saw the potential of Chinese consumers, but didn't foresee the emergence of a new ideology -- Made for China-ism. Unlike the British man, the current generation of business people act instead of think. What if China, brimming with a population of over 1.3 billion, becomes a major consuming nation? To woo consumers, from KFC's crispy Youtiao, a traditional Chinese snack for breakfast, Hermes' China brand Shangxia to BMW's China-only limited version of the M3 Tiger, more and more foreign firms have launched new products or brands custom-made for China. Others, such as the Italy-based sunglass giant Luxottica Group, established their design hubs in China. Even Apple changed its traditional line of "Designed in California, Made in China" to "Designed in California, Made for China" on the giveaway T-shirts when it opened a new store in Shanghai. "This Made-for-China phenomenon is just one of the many sub-trends spawned by the macro trend of economic and consumption power shifting toward emerging markets," according to a report by the trend research company With consumers in the eurozone and the United States laid up indefinitely, the world is turning to China to take up the slack. Calling China the "last untapped market on Earth" with unparalleled potential, Lu Haiqing, corporate affairs senior vice president of Tesco China said, "any wise and rational enterprise will have no choice but to come to China -- no matter if they like it or not." Entering the Chinese market in 2004, the UK-based grocery and general merchandising retailer now owns more than 100 outlets. "More than 4 million Chinese customers shop at Tesco China every week and the trend of trade-up is obvious," Lu said. Tesco is not alone. For Franz Collection Inc., a renowned porcelain designer and producer headquartered in downtown San Francisco, the change has been proven a success. Besides a production base supplying porcelain products tattooed with "Made in China," China is growing into Franz's major market. "This year's sales on the Chinese mainland, which has more than 100 stores, equal the aggregated earnings from 6,000-plus stores overseas," said Liu Chongli, sales manager of a Franz branch in Jingdezhen, the dubbed ceramic capital in Jiangxi province. Liu said the company this year announced a set of porcelain vases specially designed for Chinese consumers, which featured parts of a traditional Chinese ink painting of "Dwelling in the Fuchun Mountains." China's emerging buying power is an inevitable result of rising incomes, said Liu Yuhui, a researcher with the Chinese Academy of Social Sciences, a government think tank. Early this month, policy makers agreed at the Central Economic Work Conference that the country will "increase the proportion of the middle class" next year. Analysts believe the move is vital to transforming the country from the world's factory into a land of shoppers. China's consumer spending has been on the rise for years. Retail sales rose 17 percent year-on-year to 16.35 trillion yuan ($2.60 trillion) in the first 11 months of the year. The figure was more than 4 times as much as that for the whole year of 2001. The country has vowed to restructure its national economy by weaning off its reliance on exports and boosting domestic demand. President Hu Jintao expects the country's retail sales to grow by more than 15 percent annually in the next five years and hit 32 trillion yuan by 2015. Also by 2015, China is expected to overtake Japan as the world's largest luxury market, according to research released in March by McKinsey & Company, a global consulting firm. But the World Luxury Association forecast the replacement would happen next year. The scale of the Chinese market and its seemingly resilient growth paint an optimistic picture for foreign businesses. However, cashing in on the market is not easy. "The Chinese market is vast and unique. It's so special that merely dumping an existing management scheme, which succeeds elsewhere, is doomed to fail here," Lu said, adding that the country deserves a solution dedicated to it. Besides the cultural and economic diversities between the West and China, there are regional variances with the country, Lu said. "It's a big challenge for us." China has 31 provincial regions, 656 cities, 56 ethnic groups and more than 80 spoken languages on the mainland. Meanwhile, there are enormous disparities in the areas of income, education and lifestyle between different regions. According to Lu, all Tesco's China outlets are now scattered in the eastern half of the country. High costs of land transports, lack of sophisticated logistics and relatively lower income levels are the main factors that hold back the retail giant from expanding its network in China's western regions.

Hong Kong*:  Jan 2 2012 Share

When $2 billion in IPO proceeds landed in his family's bank account in mid-December, Cheng Yu-Tung emerged as one of the richest men in Asia, with a $16 billion fortune built on the twin commodities that drive China—gold and land. The 86-year-old Mr. Cheng is the patriarch of a Hong Kong family whose members span three generations and whose holdings range from New York's Carlyle Hotel, to highways and a chain of Ferrari dealers in China, to Chow Tai Fook, the world's largest jeweler by some measures and the source of the windfall from the initial public offering. Mr. Cheng's fortune has closely tracked the ups and downs of China, where he has invested for 30 years. While he has long been considered one of Hong Kong's tycoons, the recent boom in China propelled him to the very top of Asia's wealthiest families, behind names like Li Ka-Shing and Indian businessman Mukesh Ambani. "We always knew that Chow Tai Fook was his flagship, but we never knew exactly how big it was until now," said Victor Zheng, a professor at Chinese University of Hong Kong who tracks the city's tycoon families. Mr. Cheng and his family declined to comment for this article. Mr. Cheng started his career as a jeweler in 1940 when the then-15 year old fled Japanese-occupied Southern China for the neutral Portuguese territory of Macau about 70 miles away. According to a 2003 biography, he escaped attacking bandits, had his bicycle stolen by Japanese soldiers and completed the journey on foot to Zhuhai, a town across the border from Macau. He squeezed onto a boat for the last leg. He was taken in by Chow Chi-Yuen, a family friend who ran a gold shop named Chow Tai Fook, which can be translated "good fortune" in Cantonese. He married Mr. Chow's daughter in 1942 and moved to Hong Kong in 1946 to open a shop in the British colony. "They rode the crest of prosperity in Hong Kong," said Jeremy Richdale, a Hong Kong-based jewelry manufacturer who has sold gems to Chow Tai Fook. "They appealed to the wives of businessmen who made money." Gold plays an important role in Chinese culture, both as a store of wealth and as a traditional gift to mark auspicious events such as births, weddings and anniversaries. Tapping into that desire, the chain pioneered the sale of 24-carat gold jewelry, dubbing it "999.9 pure gold." As the jewelry business prospered, Mr. Cheng invested in real estate. "In the late '50s and early '60s, I was in the jewelry industry when some friends told me property is better," he said in an interview with analysts at brokerage firm CLSA in 2009. He began New World Development Co. Ltd., the conglomerate for his property and nonjewelry investments, in 1970. Mr. Cheng demands his employees, many of whom have been with the company for decades, gather for lunch in the company's simple canteen, just as he did as an apprentice. Employees are assigned a time and place at one of three tables, and served traditional Cantonese dishes like steamed fish and stir-fried vegetables cooked by the company's in-house chef and placed family-style in the middle of the table. "At the canteen, he'll sit next to you and speak very casually. He's down-to-earth, not the kind of executive that expects to be worshiped," said Albert Cheng, managing director for the Far East at the World Gold Council. Mr. Cheng, who favors Nike sneakers with his tailored suits, leaves the operations mostly to his managers, but still loves the jewelry business, said Charles Ho, a friend who owns media company Sing Tao News Corp. Ltd. "I was with him in Shanghai [in 2009]. We were out for the whole afternoon, walking, going to shops. Nobody knew he was coming. He wanted to check up on them," Mr. Ho said. "His mind is still very sharp," Mr. Ho said. "He still knows his inventory, the prices of the jewelry. Chow Tai Fook has always been his baby." Mr. Cheng and his son Henry, who began to help run the business in the 1980s, were among the first developers to invest in China, opening the China Hotel in Guangzhou in 1982. The violent crackdown of the Tiananmen Square protests in 1989 spooked foreign investors, but Mr. Cheng bet that the country's market reforms would continue. That year, New World Development made its first infrastructure deal by backing a freeway project in Guangzhou. Mr. Cheng also bet on the world's top real-estate markets, including New York, where he led a consortium of Hong Kong investors in 1994 in a $90 million deal with Donald Trump for an apartment complex on Manhattan's West Side. The group sold its stake for $1.3 billion in 2005, but were sued by Mr. Trump, who shared in the profits but claims they sold too low. The lawsuit was dismissed in 2006. The real-estate empire tumbled in the late 1990s, forcing New World Development to sell off assets and ultimately sending shares down 97%. "We were probably 10 years early in China," admitted Henry Cheng in an interview with CLSA. "With hindsight, '96-'97 would have been the best timing for expansion into China." Chow Tai Fook's dramatic expansion in China has tracked the country's recent boom. It opened its first store in China in 1998, its 1,000th in 2010 and had 1,500 outlets in September with ambitions to reach 2,000 by 2016. Revenue has increased 47% over its past three fiscal years to $4.2 billion and is expected to increase more than 30% during the current year. "Everybody knows they're the biggest player in Asia," said Varda Shine, chief executive of the Diamond Trading Council, the trading arm of diamond miner De Beers. Mr. Cheng has sold off stakes in several businesses to investors in recent years but has a mixed record of generating profits for shareholders. "They've done many IPOs in the past but one can't say they've generated a reputation for shareholder value," said David Webb, a shareholder activist and investor in Hong Kong. Shares of New World Development are down 50% this year and trade at less than a third of the value of the company's assets. The Chow Tai Fook IPO didn't go well, either. Hoping to raise $3 billion for a 10% stake in the company, the company scaled back the deal after shareholders balked, ultimately raising $2 billion. On the first day of trading, shares fell more than 7%. The family has said the IPO was more about succession planning than cashing out. Henry Cheng's 31-year-old son Adrian and 30-year-old daughter Sonia are running parts of the business. "After an IPO, there are now clear numbers on how much the business is worth, and therefore the family disputes can be decreased," said Chinese University professor Mr. Zheng, adding that the family likely wants to avoid the fiasco that surrounded ailing 90-year-old Stanley Ho earlier this year, when multiple family members squabbled for a share in his Macau casino empire.

Developer taps HK market - for a price - Dalian's Kai Shi China hopes to raise HK$180m despite facing listing charges of 30pc or more - Small mainland developer Kai Shi China, which owns two residential projects near Dalian, is tapping the Hong Kong equity market as it battles rising interest rates and tightening credit conditions in its home market. The mainland developer plans to offer 150 million shares priced between 87 HK cents and HK$1.20 each, and expects to raise up to HK$180 million through a listing on the main board. But listing costs will eat up a big chunk of the proceeds. After deducting underwriting fees and estimated expenses payable in connection with the share offering, Kai Shi said the net proceeds from the flotation would be HK$126.2 million. That suggests that listing costs will eat up HK$53.8 million, or 30 per cent of the HK$180 million target. This would be higher than the HK$49.6 million net profit it generated in 2010. However, the company was upbeat about prospects for this year, saying it expected net profit in 2011 would be at least 150 million yuan (HK$183.3 million). Han Liping, executive director and chief financial officer of Kai Shi, described the impact of austerity measures on its property sales so far as "limited". "Unlike major cities, Lvhsunkou is a third-tier city that's not subject to the restrictions on the number of home purchases," she said. At present, 46 cities, including Beijing and Shanghai, prohibit residents from buying more than two flats as the mainland authorities seek to curb speculation. As a result, property sales have plunged by as much as 70 per cent, sparking a nationwide price war among major developers. By August next year, Kai Shi will face a 475 million yuan construction bill for Kai Shi Xi Jun, one of two housing projects it owns in Lvshunkou, which should be completed before the end of 2013. Chairman Kai Chenglian said the firm's financial position was healthy. He expects the company will generate 570 million yuan in contracted sales when it releases the remaining homes in the second phase of Kai Shi Jia Nian next year. This, with its 100 million yuan in cash in the bank and on hand should be sufficient to meet its construction costs. About 80 per cent of the estimated proceeds of the share placement, or 101 million yuan, would be used to buy land in Beihaijiedao near the site of a second housing project in Lvshunkou.

Paul Y. Engineering Chairman James Chiu, left, and Deputy Chairman Tom Lau Ko-yuen, attend a special general meeting in Hong Kong in November. A Hong Kong construction company said on Friday that a plan to invest US$220.5 million in a Hollywood-China movie production venture is on hold because of rocky financial markets. Paul Y. Engineering (SEHK: 0577) said it couldn’t raise enough money from selling new shares to investors before a year-end deadline for the proposed – and unlikely – investment in Legendary East Limited - The construction company has said previously that the deal for a 50 per cent stake in Legendary East, which aims to make big budget films for worldwide audiences, was aimed at diversifying its business. Executives believe China’s increasingly lucrative film market has great potential. Chairman James Chiu said although the share sale had a “positive and substantial response” from investors, it was not enough to complete the share placement. “We anticipate that under the current difficult environment of the capital markets the placing will not be able to close before” the deadline of December 31, this year, Chiu